Credit holidays – when should the government make a decision?
As attorney Pilawska informed, the repayment conditions of mortgage loans granted before July 2022 from the point of view of PLN borrowers are still significantly worse than the conditions that were in force on the day they signed the loan agreements. “Situations in which the installments of such loans have doubled or tripled are commonplace. It is therefore not surprising that PLN borrowers, also known as Wiborowiczów, are eagerly waiting for the new statutory solution, which would be a huge relief for them in repaying the installments in 2022 and 2023 year,” said the lawyer. She added that it was about credit holidays.
She emphasized that on February 20, the government was to decide on the rules for using this support. “The currently pending draft act amending the act on supporting borrowers who have taken out a housing loan and are in a difficult financial situation and the act on crowdfunding has already been amended several times, but it seems that we have learned its almost final shape and we know for sure that granting credit holidays will be much more stringent than before,” she emphasized.
She added that as at the end of September 2023, 1.09 million mortgage loans were covered by loan holidays, which represented 57%. the number of all PLN housing loans and 68 percent value of all PLN housing loans. “This means that approximately every second borrower used this support. With the new solution, these numbers will be much lower,” said the expert.
Key RdD indicator
In her opinion, the RdD (installment to income) ratio will be crucial from the borrowers’ point of view. The expert explained that until now, the granting of holidays did not depend on the income or installment amount, but now it will be different. “If the installment exceeds 35% of the borrower’s net income, he will be able to benefit from assistance. Failure to meet this basic condition will disqualify from granting support.”
Pilawska analyzes whether 35 percent from the borrower’s perspective, it is a lot or a little: “A married couple without children with a joint income of PLN 12,000 per month and an installment of PLN 3,700. The RdD coefficient is less than 31%, which means such a couple cannot count on credit holidays” – said the lawyer .
Establishing a threshold for the value of the loan granted
Another change that is to come into force is the establishment of the threshold for the value of the loan granted at PLN 1.2 million. Pilawska pointed out that the Ministry of Finance justifies this decision by setting this threshold at three times the average loan value, which will prevent people who do not need such support from taking advantage of loan holidays, and will take into account the prices of residential real estate in large cities.
He gives an example: “With a loan of PLN 1 million and the current interest rate of approximately 7 percent, the loan installment is approximately PLN 8,000. Therefore, in order for the borrower to benefit from credit holidays, his household’s monthly income would not be able to exceed the amount of approximately PLN 23,000,” she said. Pilarska assesses the idea of limiting the loan amount positively, because in her opinion it gives hope that the support will reach people who are actually interested. “So far – as confirmed by bank data – many borrowers used credit holidays to overpay their loans, which means they did not actually need this support,” she explained.
Credit holidays were supposed to apply from March 1, but due to the ongoing legislative process, this date will probably be postponed to April 1.
