Stanowisko UKNF dot. ryzyka przedpłaty w umowach o kredyt hipoteczny z okresowo stałą stopą procentową

On June 27, 2023, the Polish Financial Supervision Authority (KNF) issued a press statement in which it informs of a letter that was recently sent to financial institutions operating in Poland as regards the management of early repayment risks in mortgage loan agreements and / or the arrangement of new or revised loan agreements in this context.
Specifically, the KNF confirms its position that banks that wish to reduce the risk of premature repayment of fixed rate or temporarily fixed rate mortgage loans by customers may offer a new, lower fixed or periodically fixed interest rate loan before the end of the original loan period. However, there are some aspects the KNF expects banks to take into account in this context:
– a prior conversion of such a loan agreement into a loan with a variable interest rate should not be made (no conversion prior to the end of validity of the fixed interest loan term) as such action would bring about more market risks for customers and banks alike and exposes banks to potential litigation costs; and
– the new interest must be set for a period that is NOT shorter than the period for which the fixed interest rate was set in the initial loan arrangement (at least five years), but not longer than the remaining credit period of the initial loan arrangement.
The KNF emphasizes that even though the law allows parties to design their loan agreements upon their individual needs and their own preferences, financial institutions need to consider Recommendation S which suggests that the fixed interest rate period should be at least 5 years and encourages extending the fixed rate period. Banks should also inform customers about the different loan agreement options they have and the associated risks and benefits with each, enabling these customers to make informed loan decisions.
Furthermore, the KNF notes that banks offering loan rearrangements need to consider the costs associated with these rearrangements as the costs cannot be levied upon customers. Also, institutions must take adequate steps to hedge any risks that arise from their loan arrangements, particularly in view of variable interest loans and loans that permit early repayment.