The bank's support is the only way for many Poles to buy their own apartment. Since July 2017, new rules of granting one of the most popular loans have been in force. Clear advertisements, clear offers from banks, complete information, the exact deadline for waiting for a credit decision and a ban on granting financing in foreign currency - these are only some of the changes introduced by the act.

The rules for the use of a popular banking product - the mortgage credit - have been collected in a legal act: the Mortgage Credit Act and the supervision of mortgage brokers and agents. The document, from July 2017, is to be the main determinant of actions for banks, intermediaries and a source of information on rights and obligations for borrowers. It introduces a number of regulations to increase their security and clarify the offers of banks.

Clear, legible, concrete information about the loan

For this reason, the Mortgage Credit Act specifies the rules for building advertising messages. Banks and intermediaries must ensure that all advertising and marketing communications relating to mortgage loans are unambiguous, reliable, understandable and visible and do not mislead the consumer*. Any ambiguity and small print will be removed from posters and flyers. Thanks to the changes in the way of informing about the features of the real estate financing offer, the borrower will immediately learn about the features of the bank product and the interest rates will be tantamount to specific information, e.g. about the real interest rate, fixed interest rate or the cost of the commitment. Already at the beginning, a client of a bank or a company providing agency services will receive a whole package of information about the loan based on a representative example, i.e. one that refers to the borrower's situation. When the customer becomes interested in the offer of a loan to buy a flat, lenders will be obliged to provide the consumer, on a durable medium, with individualised information necessary to compare mortgage loans available on the market, assess the consequences of taking them and make an informed decision on the conclusion of a mortgage loan agreement.

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21 days to process the application, 14 days to decide

The act also specifies the time within which the bank may issue a credit decision. The applicant for financing the purchase of real estate must receive an answer within 21 days. However, a refusal to grant a credit should be justified by the lender, so that the customer knows where the problem lies. After a positive consideration of the credit application and signing the agreement, the customer has 14 days to reconsider the decision and may use the possibility to withdraw from the agreement.

Conditions for granting credit

Restructuring as a rescue for the customer

If, on the other hand, the lenders should encounter problems with the timely repayment of their debts, the new regulations impose an obligation on the banks to cooperate with them in the search for the causes of the problem. The first step is a call for payment: the bank sets a deadline of no less than 14 working days and then, together with the borrower, sets the conditions for restructuring: the lender informs the consumer of the possibility to submit, within 14 working days of receiving the call, an application for debt restructuring. The repairer can count on a temporary suspension of the loan, change of instalments and extension of the repayment period.

Early repayment of credit at any time

Another change contained in the new legal act gives the borrowers the right to regulate the obligation earlier. Until now, banks have themselves determined the conditions for closing the loan before the time or in the first years of debt settlement. Now they have 7 days to determine the cost of this change. In the case of a mortgage loan bearing a variable interest rate, the lender may only charge compensation if all or part of the mortgage loan is repaid within 36 months from the date of the mortgage agreement. The fee charged as compensation will not be higher than 3 % of the total amount borrowed. In the case of a fixed-rate loan, on the other hand, the fee may be charged over the entire period under one condition: it may not be higher than the lender's costs directly linked to the early repayment. However, this explanation by the legislator needs to be clarified.

The Mortgage Credit Act definitely closes the topic of foreign currency loans, which in practice are already rare. It also indicates how tied sales are carried out: a lender may not carry out a tied sale in connection with the conclusion of a mortgage loan agreement unless the tied sale concerns a free payment account or savings and settlement account. The new regulations provide creditors with a whole package of obligations which organise the services provided to apartment buyers on credit and clarify the nature of the activities of intermediaries and agents.