Own contribution

The own contribution is a term used primarily in the context of a mortgage. It is a percentage amount that the borrower must pay towards the granting of a mortgage. Importantly - it is not an amount that is credited to the bank's account, but is treated as part of the payment for the property being financed.

The obligation to pay an own contribution appeared in 2014 as a provision in Recommendation S. Previously, borrowers could successfully take out 'mortgages' for 100% of the value of the property.

Under the current law, the minimum value of the own contribution is - depending on the bank - 20% or 10% (with the purchase of low contribution insurance).

Importantly, the own contribution does not have to be only financial resources. It can also be a payment from a developer (in the case of purchasing a flat from the primary market), or even a plot of land or other residential property.

Recently, thanks to the Family Housing Loan programme, Poles have been able to apply for a mortgage without an own contribution. Its payment is guaranteed by Bank Gospodarstwa Krajowego. The Family Housing Loan programme is a proposal for people who have the repayment capacity required by the lender, but are unable to accumulate the required own contribution.