Polish mortgage borrowers will be able to suspend their mortgage payments for a total of eight months after the president, Andrzej Duda, signed new legislation into law on Thursday.
Mortgage payers have suffered a rapidly rising cost of their monthly mortgage instalments after a series of ten interest rate hikes raised the rates from the record low level of 0.1 percent to 6.5 percent in July.
The central bank’s hikes came in the wake of surging inflation, which reached 15.6 percent year on year in June.
Under the new law, dubbed ‘credit vacation,’ borrowers will be able to suspend their mortgage payments for a total of four months this year and another four months in 2023. The suspended instalments will be pushed forward in the payment plan with no additional interest.
The new law also raises the Mortgage Payers’ Support Fund by PLN 1.4 billion (EUR 290 million) and prolongs the government’s anti-inflation shield, or tax cuts on fuel and basic foodstuffs, till the end of October.
At the signing ceremony, which was held in Warsaw’s Belweder Palace, Duda admitted that “it was not an easy law,” referring to the banking sector’s criticism of the fact that the new law will apply to all mortgage payers, not only those who are strapped for cash.
“The law on supporting mortgage payers caused a lot of debate in banking and parliamentary circles, but the draft was supported by an overwhelming parliamentary majority, it was passed almost unanimously,” Duda said.
The central bank has estimated that the new solutions will cost the Polish banking sector some PLN 20 billion (EUR 4.14 billion) in total.
“It (the law) is mainly designed to help borrowers, all those people who have bought flats, built houses, taken out mortgages and found themselves in a difficult situation due to rising interest rates and high inflation,” the president said.
The preferential solutions will only apply to mortgages denominated in the domestic currency.
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