How to take a mortgage without own contribution?



Only a few years ago a mortgage without a down payment was common. It even happened that the bank granted a loan greater than the value of the property, e.g. at 110% of its value. Why can you now get a loan up to 80% of the property value? For the safety of borrowers and banks.

In 2014, regulations were introduced that imposed the obligation to have an own contribution. Initially, you had to have 5% of your own funds, then 10%, 15%. The currently required contribution is 20% of the property value. Further improvement of the own contribution requirements is not foreseen. What to do when you are creditworthy but lacking cash? Can I get a mortgage without a down payment?

Mortgage with a low 10% deposit

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There is a group of banks where you can get a loan with a low own contribution of 10%. This is a great help, especially for young people who have not yet had time to save the right amount. If you have a 10% own contribution, you already have a good chance of a mortgage.

Low own contribution insurance

If you “bring” a 10% own contribution to the bank, the bank will require a low contribution insurance . In this situation, you have to pay the insurance premium until the loan amount drops to 80% of the property value. It may take several years. Often, however, the premium for us is paid by the bank.

Secondary market better than primary

The second situation, when a home loan reduced to 10% is enough, is to buy a flat or house at a price lower than its market value. This usually means finding a bargain or good negotiating skills. It is much more common in the secondary market when you buy a property from a private individual.

For example: if a flat worth 200,000 PLN you will buy occasionally for 180 thousand PLN, the difference is 20 thousand. PLN may be treated as a 10% own contribution. In this situation, it is enough to bring the missing 10% own contribution to the bank.

Housing loan without down payment?

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Own contribution is absolutely required. At least 10% of the property value. This does not mean, however, that you must have your own cash contribution. Above we showed examples of what to do when you have half of the required 20% own contribution. And what to do when you have no savings and want to take a mortgage without a down payment?

Money from the family

It may be easier to collect the missing own contribution, at least 10%, to be able to think about credit at all. A donation from your immediate family is tax free. But only up to PLN 19,274. If you do not want or cannot take advantage of the donation.

Additional mortgage collateral

Remember that your own contribution does not have to be cash, which you bring to the bank. You can borrow less than the loan is worth. How it’s possible? If you can secure a loan additionally on another property, the total amount of collateral will be much higher than the amount of loan needed. This will allow you to get a mortgage without a down payment in the form of cash.

Is it worth taking a mortgage without a down payment?

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A mortgage at 90% or 100% of the property price is associated with higher costs: a larger loan amount means more interest to be paid, perhaps higher interest rate, probably low own contribution insurance required. On the other hand, loan costs higher by several hundred zlotys a year may be a better solution than paying for renting an apartment or long commutes.

You should consider different options. Maybe renting or cheaper real estate will be more beneficial. The profitability of a given solution will depend on your individual situation and what is happening on the real estate market. It is definitely worth starting to postpone regularly for your own contribution. Even if you do not collect the whole sum, it will always bring you closer to the implementation of plans with your own “M”.


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