Poland’s government approved a plan for mortgage subsidies aimed to revive the country’s ailing housing market ahead of a general election slated for the fall.
(Bloomberg) — Poland’s government approved a plan for mortgage subsidies aimed to revive the country’s ailing housing market ahead of a general election slated for the fall.
The regulations, expected to take effect in July, will let first-time homebuyers keep annual interest on their mortgages at 2% for the first 10 years of the loan’s life. That compares with the current market rate of over 9% as Poland raised its key rate to 6.75% from near zero in 2021 to battle runaway inflation.
Lack of access to affordable housing has become a political topic as sales of new mortgages halved in 2022, while home builders halted new projects. The largest opposition party Civic Platform party called for interest-free home loans, also subsidized by the state.
READ: Poland’s Mortgage Gloom Deepens With Loans Set for 18-Year Low
The cost of subsidies under the government program is seen at 11.3 billion zloty ($2.6 billion) cumulatively over the next 10 years. The draft bill needs to be approved by parliament and signed by the president.
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