• On Friday, 29 July, legislation comes into force that will enable consumers to suspend the repayment of their mortgage loan instalments - for up to eight months.
• The President of UOKiK is to investigate how the 16 banks inform about repayment holidays and how they grant them.
• Concerns have already been raised about the requirement to submit several application forms, e.g. separately for each instalment or each quarter.
• Unless banks immediately change their practices aimed at obstructing consumers from taking repayment holidays, they will face charges and possible consequences – Tomasz Chróstny, the President of UOKiK, announces.

New repayment holidays are introduced under the Act on crowdfunding for business ventures and assistance to borrowers. They will be available to individuals who are repaying a mortgage loan taken out in Polish currency to finance their own housing needs. The provisions shall enter into force on 29 July. The first instalment eligible to be suspended will fall as early as in August. The Act provides for the possibility of benefiting from repayment holidays for a maximum period of 8 months.

- With higher household costs and rising interest rates translating into loan instalments, repayment holidays are a major relief for both borrowers and their families. Not only do they allow us to reduce the cost of mortgage loan servicing when interest rates are high, but also to use the money saved from instalments to overpay the loan or a so-called ‘financial cushion’ for rainy days. For this reason, it is important to avoid using these funds for day-to-day spending and to use them, for example, to make overpayments on loans so that the financial burden can be lower once the repayment holidays are over - Tomasz Chróstny, the President of the Office of Competition and Consumer Protection, stresses.

Preliminary investigation

As part of the preliminary investigations, the President of UOKiK will be continuously scrutinising how financial institutions implement repayment holidays. The following 16 banks that service mortgage loans in Polish zlotys came under scrutiny: Alior Bank, Bank Handlowy w Warszawie, Bank Millennium, Bank Ochrony Środowiska, Bank Pocztowy, Bank Polska Kasa Opieki, Bank Polskiej Spółdzielczości (BPS Group), BNP Paribas Bank Polska, Credit Agricole Bank Polska, ING Bank Śląski, mBank, Pekao Bank Hipoteczny, PKO Bank Hipoteczny, Powszechna Kasa Oszczędności Bank Polski, Santander Bank Polska, SG Bank.

– In the course of preliminary investigations, we will examine, inter alia: whether and how banks inform consumers about repayment holidays. We will also be verifying whether they have enabled timely submission of applications, including by electronic means. We will also examine whether banks hinder consumers from taking advantage of repayment holidays or try to discourage them from doing so, e.g. by unjustifiably threatening to lose or lower their creditworthiness in the future – Tomasz Chróstny, the President of UOKiK, says. - We do not approve practices that have already been applied by some banks, such as requiring a separate application for the suspension of instalment repayments for each quarter of repayment holidays, or even a separate application for the repayment of an individual instalment. This is to obstruct the use of repayment holidays, introduced to relieve the consumers – the President of the Office adds.

The first days of the new law in force may prove to be critical. It will enter into force on Friday 29 July. Meanwhile, many people make their instalment payments at the beginning of the month. It is therefore of crucial importance to make sure that banks are ready to accept applications as early as the day the law comes into force. In particular, to enable applications to be submitted as early as 29 July. Banks are obliged to ensure that applications can also be made via e-banking - so we will be paying close attention to whether these systems will operate over the weekend without any “technical” breaks whatsoever. We would like to point out that, according to the provisions of the Act, the bank must suspend the repayment of the loan instalment as of the date the application has been submitted.

Otherwise, some borrowers whose due date falls in early August and who would like to take advantage of the instalment suspension may miss out on the first month of repayment holidays.

- Since the right to repayment holidays is granted to consumers unconditionally for a single residential mortgage loan - the application for and use of repayment holidays should not have any impact on the consumer’s subsequent creditworthiness assessment. We will therefore verify whether, in this respect, banks do not victimise customers who have exercised their statutory right to repayment holidays – Tomasz Chróstny, the President of UOKiK, emphasises.

Should any irregularities be found, the President of the Office may press charges against the banks for practices infringing collective consumer interests. This is subject to a fine of up to 10 percent of the annual turnover.

Repayment holidays in a nutshell

Who can apply for suspending instalments? Anyone who has taken out a mortgage loan in Polish currency, excluding loans indexed or denominated to a currency other than Polish, in order to meet their own housing needs. The holidays apply to loans taken out before 1 July 2022 that mature at least six months after that date. Note! You can use the holidays only for a single loan.

For what period may repayment be suspended? You may suspend the repayment for a maximum of 8 months. These are August and September 2022, 2 selected months in Q4 2022 and 1 month in each quarter of 2023. The term of the loan will be prolonged by the number of months by which instalment payments have been suspended.

How much does it cost? Repayment holidays are free of charge, i.e. repayment of both the principal and interest portion is suspended. During the suspension period, the bank must not charge any fees either, except for those due for insuring the agreement.

How to apply for repayment holidays?

• File an application to your bank.
• You can do this either in paper or electronic form, including via electronic banking.
• The application must include: your and the borrower’s details, reference number of the agreement, the period(s) of suspension of repayment and a statement that the application pertains to an agreement made to meet your own housing needs. Since the statement is made on pain of criminal liability, you must also include a clause to this effect in your application (for details please see Article 73 of the Act).

From when may repayment be suspended? From the date of submitting your application to the bank for the period specified therein. The bank has 21 days to acknowledge receipt of the application and specify the insurance fees due. Be advised! Lack of confirmation has no effect on commencing repayment suspension. For example: if the application for repayment holidays has been submitted to the bank on 1 August and the instalment payment due date falls on that date as well, and if the consumer specifies in the application that he/she wishes to suspend also the August instalment payment - the bank should suspend it.

What will happen once holidays are over? The term of the loan and the deadlines provided for in the agreement will be prolonged by the duration of the suspension of the loan repayment.

Financial calculator

Interested in checking your loan instalments after the interest rate increase? Are you considering overpayment? Use the mortgage loan interest rate change calculator designed by UOKiK. It will tell you the approximate amount of your instalment and enable you to see whether, if you overpay, it would be better for you to cut your instalment rate due or shorten the term of your loan. The calculator is available at finanse.uokik.gov.pl.

Consumer support:

Phone: 801 440 220 or 222 66 76 76 – consumer helpline
E-mail: [SCODE]cG9yYWR5QGRsYWtvbnN1bWVudG93LnBs[ECODE]
Consumer advocates – in your town or district
Financial Ombudsman - when a complaint has been rejected by a financial institution

Additional information for the media:

UOKiK Press Office
Pl. Powstańców Warszawy 1, 00-950 Warszawa, Poland
Phone +48 695 902 088, +48 22 55 60 246
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Twitter: @UOKiKgovPL