Are banks bypassing the rules under the Mortgage Act?

The updated mortgage act has been adapted to the unification of the EU market. Mortgage servicing is the most important earning structure for major lenders in Poland, and this translates into consequences when considering loan applications. What does the Mortgage Act impose and how do banks deal with the requirements in practice? Is there any abuse or circumvention of certain provisions?

Pursuant to the Mortgage Act, banks must provide the borrower with a standard and promotional form. Dependence on the sale of a mortgage on the purchase of another financial / credit product is a prohibited clause entered in the register of the Office of Competition and Consumer Protection. In practice, tying is somehow forced on the consumer by inflating the basic costs of granting a mortgage. This means that the consumer will opt for a combined / bundled offer anyway, because in short, it is cheaper. The borrower should understand that he has the right to refuse additional products. Life or other types of insurance can be entered into the mortgage contract separately after effective comparison.


The Mortgage Act specifies the time

The Mortgage Act specifies the time

It is during which the bank should issue the final loan decision after the client submits the application. The deadline of 21 days is unsustainable in most facilities. For this reason, lenders break the customer verification process into several stages. This means that already at the stage of the inquiry, the bank carries out a detailed analysis of creditworthiness. After qualifying the borrower for further cooperation, the actual mortgage application is submitted. Breaking down credit decisions into stages allows banks to reduce their risk.

In accordance with the law, banks undertake to consider the client’s restructuring application, and after refusing, allow the sale of the loaned property within a minimum of six months. The Mortgage Act also precludes banks from charging commission for early repayment after a three-year repayment period. The banks have correctly adapted to this standard. Thanks to this, the borrower can flexibly manage the repayment dates.


Apparent changes in some areas

mortgage loan

The Mortgage Act provides for many positive changes, but by not specifying certain elements, it has increased formalities when considering loan applications.