As HRE Investments analysts indicate, over the years, overpayment has been a rarely used solution. For a long time, interest rates in Poland were historically low, so the interest on loans was also small. This changed along with the rate hikes at the NBP.
Almost PLN 25 billion is the value of overpaid Polish zloty housing loans in the first half of this year. This is probably the highest result ever – it follows from the HRE analyzes. In 2015-2020, overpayments were PLN 5-11 billion per year.
According to analysts The breakthrough in terms of funds allocated for loan overpayment was 2021. At that time, the amount earmarked for early repayments and overpayments of housing loans exceeded PLN 23 billion.
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– The data available today allows us to estimate that this record was broken in just six months of this year. The money allocated to the overpayment of the loan here and now allows you to lower the monthly installment in a way that may not be spectacular, but noticeable – points out Bartosz Turek, HRE expert.
Loan overpayment. Two options
He notes that when overpaying a housing loan, you can choose between two solutions: shortening the loan period while maintaining the current installment or reducing the installment while maintaining the current loan period.
– The main reason for the overpayment and the primary benefit is the reduction of the total cost of servicing the mortgage debt. Simply because of the overpayment, we will have to pay the bank less interest. If we want to feel the effects here and now, it is worth choosing the option of reducing the installment while the loan period remains unchanged. This is a significant support for the current home budget – explains Turek.
However, if someone wants to reduce the total cost of loan servicing as much as possible over 10 or 20 years, it will be more advantageous to stay with the same installment, but shorten the loan period. Then it will pay off interest faster and get rid of the loan faster.
It is worth remembering that when deciding to get rid of the mortgage debt faster, you should find out whether the bank will not charge an additional commission on the occasion of the overpayment.