What instead of cash as a contribution to a mortgage? There are several options

The purchase of an apartment in Poland – whether for one’s own needs or as an investment – almost always involves a mortgage. One of the basic requirements of banks is an own contribution, i.e. the portion of the property’s value that the buyer finances with his own funds.
According to the recommendation of the Financial Supervisory Commission (FSC), the minimum own contribution is 20% of the value of the property, although in some cases banks accept 10% if the customer takes out additional insurance.

But what to do if you don’t have that kind of cash at your disposal?
From the perspective of the Atlant Estates agency, there are several viable alternatives. In this article, we explain what can replace cash as a downpayment and how to prepare for a mortgage in Poland – especially if you are an investor or a foreigner.

What is an equity contribution and why is it so important?

The own contribution is a form of security for the bank – the larger the amount that the buyer invests from his own funds, the lower the risk for the lender.
In practice, this means that a person who has, for example, 200,000 zlotys to buy an apartment for 1,000,000 zlotys, needs a loan for only 800,000 zlotys, which affects better credit terms, lower interest rates and a greater chance of a positive bank decision.

On the other hand, raising such a large amount can be a challenge – especially for young buyers or foreign investors. That’s why it’s worth learning about alternative forms of equity contributions that banks accept.

Alternatives to cash as a contribution

1. The value of the plot or property

One of the most common solutions is to replace your own contribution with the value of a plot of land or other property you own.
If you are planning to build a house and the plot of land belongs to you, its market value can be up to 100% of the required contribution.

Conditions to be met:

• The plot of land must have a regularized legal status,
• may not be mortgaged,
• must have an up-to-date appraisal, performed by a real estate appraiser,
• should be in accordance with the local development plan (LDP).

💡 Example:
If the value of the plot of land is PLN 200,000 and you build a house for PLN 800,000, the bank may consider this amount as your own contribution and finance the remaining 80%.

2. Value of other property as collateral

Some investors wonder whether it is possible to use another apartment as a form of equity contribution.
Yes – provided that the property is free of credit and its value covers part or all of the required contribution.

The bank can place an additional mortgage on it, which reduces your cash obligations when buying a new property.
This solution is particularly popular among investors who already have a portfolio of apartments on the secondary market.

3. Funds accumulated in IKE or IKZE

Banks are also increasingly accepting savings accumulated in investment forms, such as:

• Individual Retirement Account (IKE).
• Individual Retirement Security Account (IKZE).

It is important that these funds can be documented as their own and be available when needed.

4. Programs with BGK guarantee – Apartment without own contribution

Under the government’s “Housing Without Contribution” program (Family Housing Credit, RKM), part of the contribution can be replaced by a guarantee from the Bank of National Economy (BGK).

This solution allows you to take out a loan for up to 100% of the value of the property, if you meet certain conditions:

Program terms:

• The credit application is for the first apartment,
• The buyer must not own another property at the time of purchase,
• The property must not exceed the established price limit per m²,
• The maximum amount of the guarantee is 20% of the value of the property, but no more than PLN 100,000.

💡 Example:
You buy an apartment in Krakow for PLN 600,000, you have no own contribution. BGK can guarantee PLN 120,000 (20%) and the bank will give you a loan for PLN 480,000.

5. Contribution in the form of expenditures made for construction

If you are building a home using a home improvement system, your own contribution can be documented expenses for materials or construction work, such as:

• Purchase of bricks, cement, wood,
• Paying the construction team,
• making connections.

The condition is to document the costs incurred with VAT invoices.

6. Family support and donations

Banks also accept donations from immediate family as a source of contribution – as long as the funds reach the borrower’s account and are documented by a wire transfer and a donation agreement.

💡 Note:
Some banks require the funds to be in the customer’s account for a certain period of time before applying for a loan (e.g. 3 months).

What you can’t use as a contribution

According to an analysis by Direct.money.co.uk, customers often make the mistake of trying to finance their own contribution with a cash loan or credit.
This, unfortunately , is not accepted by banks, as these funds are not treated as “own.” – they increase debt levels and lower creditworthiness.

Also, so-called “personal loans” between friends without a formal contract will not be recognized by the bank.

Summary

Lack of cash doesn’t mean you have to give up on buying an apartment. There are many alternative forms of equity contribution, from land, to real estate, to BGK guarantees. The key, however, is to properly prepare the documentation and select a financing strategy.

At Atlant Estates, we help individuals and investors with:

• creditworthiness analysis,
• Choosing the best banks and programs,
• document preparation,
• Finding properties with high ROI in the primary and secondary markets.

📞 Contact Atlant Estates

If you are planning to buy an apartment in Poland or want to learn about financing options for your investment without a down payment, contact us.