Poland Polish economy

Polish mortgage for Americans – EU citizens – Credit in Poland for foreigners

You can get a Polish mortgage to buy real estate in Poland, if you are from the USA or from the EU. However the requirements are more. You might even be a Polish citizen like me with US-based income and the scenario is different than if you are a Polish guy working in Poland with a work contract. You basically need a larger down payment. The purpose of this post is to give you a little more detail based on my personal experience.

Polish mortgage home Poland
Polish house in the countryside - old fashion style

Here are some Polish real estate words: – hipoteka – the Polish word for Mortgage or Kredyty (not uncountable like in English) or Doradca Finansowy, kredyty hipoteczne, pożyczki which is the Polish language word for loan, etc.

This is the way you get a Polish mortgage

  1. having Polish income – just like in the USA (credit check income proof small down payment)
  2. having EU income – like a normal mortgage above, but need to take additional steps. So if you are a Polish guy working in London lets say, you need more money down and proof from your employer and a few extra things and a larger percentage down.
  3. having USA or no non-EU income – Most banks do not touch this but a few do. I recommend going through some special companies that search for mortgages for you, some mortgage brokers in Poland, like Expander. – but they are young sales agents guiding your towards their banks, but still they work.

Where to get credit in Poland for real estate

I guess I recommend to try a bank like BNP Paribas, first the Polish subsidiary, not the parent in France.

I think they are pretty good and they do these types of loans in Poland. They are pretty nice and professionals that work there know what they are talking about.

Citibank Poland does not do these types of loans even for Americans, surprise.

Basically the first answer when you look around at bank or call place will be no.

Even Banks that do these loans will tell you no because the people that working are like this, are just low-level clerks, like postal workers and they are really whatever and do not want to be bothered or do not know their job outside of the ordinary day to day tasks.

For example, I asked at a bank where my American friend just got approval and did his loan in Poland and the manager told me ‘we never have done or will do this type of load’ her assistant was nodding in the background. Then I told them that my friend just did, right here. They still said no and gave a nasty look.

This is Poland. People will give you definitive answers even though they have not research it further (communism did this I think). The reason I tell you this is to tell you yes you can, do not give up.

You can get a loan but you need to really look around. For a non-Polish loan, you will need about 100,000 pln as a down payment, maybe 50,000 your target home is not too expensive. But that is only 30,000 us dollars. If you have this doors open. But Poland is not poor Poland anymore and US incomes and bank accounts do not impress, so foreigners getting loans in post a post economic crisis world have a hard time now.

This is in start contrast with 2007 before the real estate bust in Poland and the world where you walk into any bank and you would get 110% loan.

What you need to a Polish mortgage as a foreigner

  • 100,000 Polish zloty down payment
  • Then you will need to show your source of income from your US tax return and or employer. Then a US credit check. If your source of income is large they may lower the down payment. So it is easy except they require a large down payment.
  • Take your age, the total years of the mortgage is shorter, they take it and subtract it from like 65 and that is the maximum length of the mortgage you can take. Remember mortgage comes from the Latin word ‘mort’ and you know that that means.

An alternative is take a personal loan in the USA and use it to buy something in Poland but that is really not enough money or a high interest rate. Also look into UK banks or US banks that finance foreign property, but in this market, everyone wants not only proof of income but a large down payment if you are going to buy the new four letter word in financing that is Real Estate.

Building instead of buying a home in Poland – self finance with a stream of income

Also consider building and home and doing it in stages, it may take like 5 to 7 years but you can pay cash. This is what we are considering doing. Let me know if anyone has questions of need clarification on Polish mortgages and financing.

I think the idea of a dream place in Poland is a good dream and it is our dream too, to have a home in the USA and a cottage in Poland. I just think you have to either pay for building it in cash over many years, which we might do, have 30,000 USD to put down and good USA income, or buy a cheap place in the Polish countryside and fix it up.

Poland Polish economy

Why are Polish wages low?

Polish wages are lower than the EU

Polish wages are not on par with EU average wages. Why is this so? Poland has been free from communism for over 20 years and part of the EU for over 7. Why does someone only a few hundred miles away in Austria, Germany or Sweden get paid many times more than workers with comparable skills in Poland?

It is changing but I know many educated Poles with low wages. On one hand, if you want to start a business it is a good place as wage levels are low. Start a business in Poland and you can be rich and employ cheap labor with good skills.  However, but on the other hand for the average Pole it is harder to live.

I am a capitalist and economist and in a free market, which the EU is, this should not exist unless there is some market distortion. There could be an argument that the lack of capital that causes this but in my view it is more a distortion of the market lets look at why.

Why wages are low in Poland

Here are the three reasons why Poles earn less.

  1. excess government drains resources of the people
  2. lack of capital to generate enough labor demand
  3. bosses have an Eastern European business acumen.

Poland’s government is still not free

The main reason is the government controls too much, the system is weighted down by laws, ZUS, lack of transparency, corruption, high pension for government workers that they could never get in the private sector, early retirement for government workers etc. The country is socialist country. There is a huge tax on the productive. The government wants to change but it is still a long way from transparency. Bribes must still occur in government because the things I see just do not make sense.

  • I would pass a law like Norway did that if you are caught in a lie or a bride, you lose your future pension for life. In one day it stopped corruption.
  • I would privatize everything and model it on a libertarian system of government. Let the markets work and reduce the weight of government offices.
  • Increase taxes on tobacco, drinking etc 2000%.  Save money on health care, while generating money for things like hosptials. Greece use to be one of the unhealthiest countries and they did this and over night statistics changed and it became one of the healthiest. There are a lot of people living off the system and drinking and smoking their life a way. It is unfair for the productive.
  • I have many other progressive ideas for Poland that is the beyond the scope of this post.

Government controls and offices still have too much power. Government sector workers seems to be richer in many ways than private sector workers.  Some how things to do not add up.

Lack of capital and developed money markets

The Polish economy had no crisis and is hot. It is exporting to Germany and the world and there is a world of opportunity for business. Capital is coming in from everywhere. I do not think there is a capital shortage in Poland. It is a golden opportunity for those who see it.

Polish business owners

I personally think it is because many Polish owners are greedy and do not play by the same rules as in the west. A great example is Polish real estate prices are distorted to the point it is twice that of Berlin for example. Markets are not competitive and business owners know this. They manipulate the system and keep wages low.

I see a large difference between rich and poor.  Bosses have much more and flaunt it as new rich do.  I see those who have power able to work the government system, legally and maybe even illegally to their own advantage. On the surface the old ways of socialism has been removed. But the reality is there is a lot of red tape and bureaucracy still that needs to be overcome in Poland.

Tea party movement in Poland

Poland needs to wake up and even a tea party movement to liberate it from the burden of government.  When markets are free middle class wages rise. When a country is socialistic, everyone is poorer except those in control.

I have personally had many roadblock in government. I tried to do the honest good thing.  Fat cat bureaucrats are too entrenched.  I would say at the top and in Poland in general people are responsive and very aware of these things. I did get a response when I pushed an issue high enough, but low down it was hard.

Hence, why are Polish wages so low? Excess government. It drains the economic life out of people. But the good news is I love living in Poland and things are nice here. If I sound like I am complaining I am not. I do the same about the USA government and its excesses because I am more of a libertarian Adam Smith free market economist.


Poland Polish economy

Polish economy

Polish economy is one of the most resilient economics in the world.

Why the Polish economy did not have a recession

I am an American who lives in Poland.  Poland does not have the downturn that western Europe and America has.

In fact Poland was the only country in Europe and America that did not have a crisis and continued to grow.

I read many economic experts in the west for years call for the fall of the Polish economy, it did not happen and I knew it would not as I live here and see the way Poles do business.  Now predictions have changed and there is a greater confidence in Poland.

The reason is simple.  Polish people did not get crazy with credit.  They are very down to earth people.  When they want to buy something they usually pay cash or on a large purchase put a lot of money down.

Businesses do not run with a lot of credit.  Even in a country which has a capital shortage Polish businessmen are very practical and conservative with loans and credit.

Polish economy

Poland is the largest small nation or the smallest large nation.  Either way, it has a balanced economy.  Poland has fuel, super agriculture, manufacturing, high tech research and development.

Further it has something that other economies does not have.  That is Poland has a large internal economy. Even if it were cut off from the world Polish people buy things from Poland and count survive.

The Poles are perhaps the most educated people in Europe because of the tradition of free education to the PhD level.  Everyone I know has at least a masters degree.  Generally Poles are hard working humble people.

Poland is now a recipient of globalization.  Meaning it is a low cost high tech country in the EU.  There is no need to outsource to India when Poles speak English and you can do it in the EU.

Some people say Polish corruption is a problem.  However according to  Poland is one of the cleaner countries in the world with corruption and the most improve.

If you want to set up a company in Poland it is very easy, and if you live in a city you can do it in one day.  The Polish government plans to put this all online soon.

You also have a 19% flat tax.  This in my opinion is clear and easy.

Poland gets a lot of money from the EU and will continue to get money until 2020 about. Therefore, if you want to apply for funds it is not hard as long as your project is valuable and unique.

There are few downsides to the Polish economy.

Poles are never happy with their economic  situation

If you ask an American how they are doing, even if they are losing their house and car and are in debt they will tell you fine.  If you ask a Polish person, even if they have two houses and no debt they will complain. There is a difference in the way Poles and others see the world.

However, this is actually a good thing.  When you are not satisfied with the current situation you will  always looking for  way to improve then you will be better prepared for what life throws at you.

This is not a perfect academic explanation why Poland is not in a crisis, but it does not mean it is not accurate.