Faced with rapidly rising interest rates, which have driven up mortgage repayments – often by as much as 100% – the legislator has introduced an unprecedented lifeline: the so-called statutory repayment holiday. The new regulations allow borrowers to defer repayment of up to 8 instalments between 2022 and 2023. We explain, step by step, exactly what requirements need to be met and what pitfalls borrowers (particularly those renting out flats) may encounter.

Please be aware that suspending loan repayments is not debt forgiveness. The frozen months will be automatically added on at the very end of your repayment schedule (extending the duration of your agreement with the bank). It's simply a free, multi-month breather for your household budget.

Holiday credit. User manual

Moratorium na spłatę kredytu.

Before you jump to conclusions, you must verify your agreement against the wording of the Mortgage Credit Act. To be eligible for the holiday, your contract must be classified as Mortgage – it can also be a loan agreement (if its purpose was the purchase of residential property not related to business activity). The legislator expressly excludes, among others: loans from an employer, reverse mortgage agreements or loans intended for renovation not secured by a mortgage.

Most importantly: the loan must have been granted and disbursed in Polish zloty (PLN)Borrowers with franc-denominated loans, who have separate issues with indexed or de-nomination agreements, do not qualify for this specific systemic support.

Key conditions (5 statutory requirements)

To summarise the regulations, you will be able to take out credit holidays if you meet all 5 of the following requirements:

1. Your loan is a "mortgage" (as defined by the Act).
2. The loan is taken out in Polish currency.
3. The agreement was concluded before 1 July 2022.
4. The repayment schedule for the agreement ends after 1 January 2023.
5. The loan was taken out for to satisfy their own housing needs.

Mortgage holiday and rental property

The entry about "own housing needs" keeps many people awake at night. What if a mortgage was taken out with the intention of living in the property (e.g. 5 years ago), but due to a change in life plans (e.g. expanding the family), a house was built, and the previously mortgaged flat was rented out?

Due to the criminal law implications of signing declarations, we are using here linguistic conceptwhat counts is, For what purpose (originally) was the contract concludedIf it was indeed taken out to meet your own needs, renting it out today theoretically doesn't preclude you from a refund. The situation is reversed if, when taking out the loan, the agreement explicitly stated "investment purchase" or "for rent" - in such cases, submitting an application would risk liability for making a false statement.

Schedule: How long can you suspend payments for?

The legislator has imposed a strict corset of deadlines. You can avoid payment for a maximum of 8 rats spread out over time as follows:

• 1st August – 30th September 2022: can be suspended 2 instalments (months).
• 1 October – 31 December 2022: can be suspended 2 instalments.
• 1 January – 31 December 2023: can be suspended One instalment per quarter (4 instalments per year).

How and where do I submit an application? (Criminal penalty)

Customers benefit from the fact that credit holidays are processed automatically upon receipt of the application by the bank (e.g. submitting a form via online banking). The bank has 21 days to send you confirmation on a durable medium, but the absence of such confirmation does not affect the fact that your repayment is frozen.

In the application, alongside the standard data (contract number, personal details, period of suspended months), the following clause must appear: I am aware of the criminal liability for making a false statement. (relating to your own housing needs).

Surprises: credit insurance and new deadlines

Although the law prohibits banks from charging interest or "regular" capital instalments during the suspended months, an exception was made for fees. If your loan was integrated with mandatory insurance (e.g., life insurance, bridging insurance), you must pay these premiums independently of the loan repayment holiday. The insurance premium amount should be stated by the bank in the aforementioned confirmation sent back to you.

In turn, the term of the agreement itself, as well as the mortgage burden, will automatically be extended by the number of months for which you used the relief. Consequently, there is no need to update the mortgage in court or ask family members who are its "providers" for special extension consents.