The Polish Credit Holiday Debate: What It Means for Borrowers and the Banking System
In a period when central bank rates rose and loan costs at commercial banks climbed, the United Right government introduced a measure to grant borrowing holidays for people who financed their first homes with bank loans. The aim was to cushion first-time buyers from the immediate impact of higher borrowing costs, while they navigated a shifting inflation and interest-rate landscape.
The legislative framework allowing credit holidays was launched in spring 2022, permitting up to seven months of relief. That amounted to three months in 2022 and an additional four months in 2023. Recently, as rates stayed relatively high even after inflation showed signs of retreat, the government led by Prime Minister Morawiecki submitted a bill to extend these holidays into 2024. The decision followed a Monetary Policy Council move that cut the base rate by one percentage point after inflation fell by a notable margin, though overall loan rates remained elevated.
Justification for the new bill cites about 1.1 million borrowers who used loan waivers and another 1.7 million who benefited from similar relief. The government’s proposal outlines four months of credit holidays for 2024, distributed as one month in each calendar quarter. For loans up to PLN 400,000, provisions remain aligned with the 2023 framework, while borrowers with larger loans face income-based criteria. Specifically, the plan requires that the borrower’s loan-related costs exceed 50 percent of the household’s total income to qualify for exemptions. Banks bear the direct costs of these holidays, with the state budget absorbing the impact indirectly by reducing banks’ profits and, consequently, affecting tax revenues from banking activity.
Meanwhile, a new coalition majority in the Sejm drafted its own loan-liberalization bill. It appears to be largely symbolic, potentially covering only 50,000 to 60,000 loans in practice. If enacted, more than a million existing beneficiaries who already used exemptions could find themselves excluded due to the stricter eligibility rules. Critics describe the approach as perplexing, arguing that politicians from multiple parties appear to defend banking sector interests—sectors that posted profits nearly quadrupling year-on-year in the January–September period, reaching close to PLN 21 billion in 2023—whereas the aim was to support young people purchasing their first home with a loan. This contrast has sparked intense debate about balance between lender profits and consumer relief, especially for first-time buyers.
Marshal Hołownia has returned both bills for initial discussion to the Public Finance Committee. A subsequent committee meeting was rescheduled and then canceled without a formal announcement, creating uncertainty about the legislative timetable. The loan-holiday proposal backed by the emerging majority was withdrawn as details became public. At present, there is no fixed date for the first reading of the government bill, which remains in committee as deadlines tighten. Even if passed by the Sejm and later the Senate, the president would still have to sign off, with a 21-day window to respond to Parliament. The timeline is pressing because the process should be complete by December 31 so banks can prepare their systems to handle applications electronically.
Early indicators suggest the newly formed parliamentary coalition led by Hołownia may fail to advance the credit exemption law. If that happens, approximately 1.1 million borrowers who expected relief could be left without support in 2024. Observers warn that the political dynamics surrounding banking policy are shaping the prospects for real-world relief for millions of households. The discussion continues to hinge on how governments balance the needs of young buyers with the financial health of lenders and the broader economy, a topic watched closely by financial analysts and everyday borrowers alike.
Note: The information above reflects ongoing parliamentary developments and public policy discussions reported by media outlets in Poland, including commentary and analysis published by wPolityce. The situation remains fluid as bills move through committee stages and political negotiations unfold.