The President of the Polish competition authority (UOKiK) has announced plans to begin legislative work on a new law that will establish uniform templates for mortgage contracts based on periodically fixed interest rates. This initiative aims to protect consumers while also minimizing legal risks for banks.

Polish consumers face significant challenges when purchasing homes, particularly due to high mortgage costs, which are among the highest in the EU. Complicated contract templates often contain unclear clauses and conditions, such as those linking margin rates to the purchase of additional services. The proposed standardized templates are designed to safeguard consumers from unfair contract terms.

UOKiK has extensive experience in evaluating mortgage contract conditions and has been analyzing consumer signals regarding unfair terms. The authority has been working for over a year on templates that would apply to both primary and secondary housing markets. The President emphasized the necessity of these templates to ensure affordable financing options for Polish citizens.

The introduction of standardized mortgage contracts would require lenders to use the statutory template without modifications, thereby protecting consumers from unfair clauses. This change is expected to enhance transparency in mortgage lending and facilitate easier comparison of offers from different banks.

Additionally, the standardized contracts would prohibit the sale of additional services alongside the mortgage, except for property insurance, making monthly payments more predictable for consumers. The templates would also standardize the calculation of compensation that banks can claim when consumers opt for early repayment.

According to the proposal, mortgages based on the standardized template would feature a fixed interest rate for at least five years, providing consumers with greater financial predictability during critical repayment periods. The President noted that the current market lacks adequate safeguards for banks, but as the fixed-rate mortgage market develops, longer fixed-rate periods may become available.

One of the pressing issues in the financial sector is legal risk, which significantly impacts mortgage costs. The introduction of a safe, standardized mortgage contract template is expected to minimize this risk. If the law ensures that there are no unfair provisions and that both parties' rights are balanced, these conditions cannot be challenged in court.

The President of UOKiK concluded that consumers need clear and safe contracts to make informed decisions about long-term financial commitments, while the sector requires stability and fair market rules. The goal is to ensure that contracts are free from unfair terms and that banks have legal certainty regarding their agreements. The authority hopes to receive approval to proceed with legislative work so that the proposal can be presented to the parliament by early next year.