Mortgage holidays – a breather for your wallet

In times of rising inflation and high interest rates, we are all looking for savings – especially if we are weighed down by a mortgage taken out to buy our dream flat. This year a law came into force that gives borrowers the option of taking "mortgage holidays". How do they work and how much relief can they bring to your wallet?

How do mortgage holidays work?

So-called mortgage holidays are simply a break from paying loan instalments. Of course, the instalments are not cancelled – the repayment period will later be extended by the length of the holiday. So thanks to this break we can put off repaying the loan for a while, which will certainly give our wallets a chance to breathe.

But can we take a rest from our mortgage instalments at any time we like? The law passed a few months ago guarantees the option of taking mortgage holidays in 2023 for a period of four months; we will therefore defer the repayment of four mortgage instalments to a later date. Is that a lot? At present, every moment of respite from rising expenses can help to patch up and put the household budget in order, so property owners who are repaying a mortgage should think about it seriously.

Who will benefit from mortgage holidays, and who will not?

Fortunately, the Act on Crowdfunding and Assistance to Borrowers aims to support Poles burdened with a mortgage regardless of its amount. Whether we are repaying a loan on a house in a suburban town or on a property in Katowice, we are entitled to mortgage holidays. There is, however, one catch. Only borrowers who bought the property for their own housing needs can take a break from repaying instalments. This therefore excludes, among others, people investing in flats to let. Those repaying a loan in a foreign currency cannot take mortgage holidays either.

How do you apply for mortgage holidays?

To suspend loan repayments for several months, we will need to submit an appropriate application to the bank that granted us the mortgage. Under the Act, banks should make it possible to submit the document both on paper and electronically. The procedure itself should not be difficult – online it can take just a few minutes.

What information will the bank require from us? Mainly information that allows our loan to be identified – that is, personal details and the loan agreement number. We must also submit a declaration that we use our property for our own housing purposes – in other words, simply that we live there. The application must also state in which months we want to suspend the instalments.

After the application is submitted, the bank has three weeks to confirm that the mortgage holidays have been granted. If all goes well, we will be able to enjoy a several-month rest from the instalments weighing on our property!