• The President of UOKiK Marek Niechciał called on banks which grant mortgage loans.
• UOKiK expects the banks to introduce fixed-rate mortgage loans to their offer.
• It would mean better protection of consumers throughout the duration of their long-term loan agreements and stability of the financial sector in Poland.

The Office of Competition and Consumer Protection (UOKiK) analyses the activity of banks with respect to granting mortgage loans. One of the elements of this analysis consists in verification of the quality of consumer service in the process of offering PLN-denominated mortgage loans in the years 2011–2017. UOKiK also studies the information policies of banks.

“We are concerned about two things. First and foremost, the manner of informing clients about the risk connected with taking out PLN-denominated loans with a variable interest rate. At present, clients are not always aware of the risks associated with this product. Moreover, it is disadvantageous that banks offer virtually no mortgage loans with a fixed interest rate which would apply throughout the entire agreement or a significant part of its term. They should constitute a real alternative to variable-rate loans,” explains the President of UOKiK, Marek Niechciał.

UOKiK expects the banks to develop and implement solutions which will ensure comprehensive and understandable information on the risk associated with mortgage loan agreements. This refers in particular to the risk of increasing interest rates. The above applies to the stage of signature of such agreements, but also performance thereof. When offering mortgage loans, financial institutions should take the situation of each consumer – in particular the fact that he or she has no legal or economic expertise – into account at each stage of cooperation, rather than only on conclusion of a loan agreement.

The President of UOKiK recommends that banks develop a system for informing and alerting consumers early of the expected unfavourable changes on the market as regards interest rates. At the clients’ request, such an alert would lead to launching the stabilisation mechanism developed by the bank, which would mitigate the direct adverse effects on borrowers.

“It is vital not only for the interests of consumers but also for the stability of the Polish financial sector that banks start offering more fixed-rate mortgage loans. The low popularity of this product so far is connected with its lower attractiveness compared with variable-rate loans. Consumers will be interested in such products as long as they are more competitive,” stresses the President of UOKiK, Marek Niechciał, in his letter addressed to bank presidents.

Fixed-rate loans generate a lower risk for banks as well. This should be reflected in lower margins and result in the current instalments of fixed-rate loans being competitive in comparison with variable-rate loans.

At present, many banks rely on recommendations of the Polish Financial Supervision Authority as their only point of reference with regard to offering PLN-denominated loans and taking information measures. In the opinion of the President of UOKiK, this does not restrict the ability to create and apply higher standards which are tailored to the changing situation. It is also in the interests of banks, as it increases their long-term economic security.

UOKiK constantly monitors the mortgage loan market. The banks are expected to provide to UOKiK information on the implemented or planned solutions which will allow consumers to lower the risk connected with their loans. UOKiK does not exclude the possibility of further action aimed at improving the situation of borrowers.

Additional information for the media:

UOKiK Press Office 
Phone: +48 22 55 60 111
Email: biuroprasowe@uokik.gov.pl

Twitter: @UOKiKgovPL