Loan quality decline, why is the mortgage getting harder?

As the number of mortgages granted to a given person increases, one can notice a decrease in the quality of these loans. This means that they are getting worse paid off. As a consequence, it is increasingly difficult to get such a loan.

The last quarter of 2018 brought us tightening mortgage lending criteria. According to BIK (Credit Information Bureau), the new year began with a decrease in interest in housing loans by 8%. During this time, the average loan amount increased.

 

Mortgage is getting harder and harder

Mortgage loan

The Polish Central Bank conducts surveys every three months. They are aimed at obtaining information on changes in lending policy. Based on these analyzes, it can be seen that access to mortgages (mortgages) is becoming increasingly difficult.

According to NBP research, in the third quarter of 2018 banks significantly tightened mortgage award criteria (-58%). Last quarter of 2018 ended with even stronger “tightening the screw” which gave a substantial -61 percent. The Central Bank gives the results as a “weighted net percentage”, the voice of larger banks has more weight, and the opposite signals are added together (+ would give a relaxation of criteria, – tightening them).

Unfortunately, further research predicts that this year we will see even more severe changes in the issue of obtaining a mortgage.

 

The more loans, the worse their quality

The more loans, the worse their quality

According to BIK, currently over 90% of people with a housing loan, contracted in PLN, repays only one such loan. The value share of mortgage loans delayed over 90 days in the value of all such loans repaid in PLN, in the case of repayment of one loan is 2.9%. This share increases with the amount of housing loans taken out in PLN, and so with 5 loans repaid it is already 13.6%.

According to BIK, there are currently 393 people paying back over 5 housing loans taken out in PLN. They have PLN 396.5 million to repay. zlotys.

 

Credit market in 2019

credit loan

“2019 will be very interesting on the housing loan market. There will be two opposite trends, ie a decrease in the number of applicants and an increase in the average amount of the loan applied for. … The scale of these two phenomena is still difficult to estimate. The MdM (Apartment for young people) program has ended and it is difficult to estimate the scale of the effect of the lack of continuation of the MdM program in 2019. “

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