What is the minimum down payment on a mortgage?

Recommendation S of the KNF (Poland's Financial Supervision Authority) provides for a down payment of 20% of the property's value. A bank can, however, accept 10% if it secures the missing part in another way - most often with low down payment insurance, which in practice comes down to a higher margin (usually by 0.2-0.5 percentage points) until the loan is repaid down to 80% of the property's value.

How much does a 10% down payment cost instead of 20%?

For a PLN 600,000 flat, at 7.5% interest over 25 years, a 20% down payment means a loan of PLN 480,000, an instalment of PLN 3,547.16 and interest of PLN 584,147.30. A 10% down payment means a loan of PLN 540,000, an instalment of PLN 3,990.55 and interest of PLN 657,165.71. Adding low down payment insurance (a margin 0.3 percentage points higher for the first 6 years and 7 months), the interest rises to PLN 669,830.44. So the missing PLN 60,000 of down payment costs PLN 85,683.14 of extra interest.

Can you take a cash loan for the down payment?

No. The bank sees every commitment in BIK (Poland's credit bureau) and checks where the money comes from, and money from a loan is not a down payment but another debt. A PLN 60,000 cash loan at 12% over 8 years means an instalment of PLN 975.17, which cuts your borrowing capacity from PLN 495,213 to PLN 387,898, i.e. by PLN 107,315. You borrow PLN 60,000 and lose PLN 107,315 of capacity - you are PLN 47,315 down.

How do you save up a down payment?

By putting aside PLN 882.27 a month at 5% a year, you will save PLN 60,000 in exactly 5 years: you pay in PLN 52,936.20 out of your own pocket, and the rest, PLN 7,063.53, comes from interest. By putting aside PLN 1,000 a month you will reach PLN 60,000 after just 4 years and 6 months, whereas keeping the same money in cash you would need a full 5 years.

Mortgage

Down payment: how much you really need and where to get it

A down payment is not a formality - it is a price. For a PLN 600,000 flat, the difference between a 10% and a 20% down payment is PLN 60,000 in cash today - and PLN 85,683 of extra interest over the next 25 years. Below we work out both scenarios, the legitimate sources of a down payment and one mistake that sinks your application from the start.

Reading time: 10 minutes · 14 July 2026 · Piotr Litwa, KredytPartner

What the minimum is

KNF Recommendation S (issued by Poland's Financial Supervision Authority) provides for a down payment of 20% of the property's value. It is not a law and not a ban - it is a supervisory recommendation that banks treat as a rule, because their capital requirements depend on following it.

The recommendation does allow an exception, though: a bank can accept a 10% down payment if it secures the missing part in another way. In practice this means low down payment insurance - and, as we are about to work out, it is not free.

The key concept is LTV (Loan to Value) - the ratio of the loan amount to the value of the property. A 20% down payment means an LTV of 80%. A 10% down payment means an LTV of 90%. This is the number the bank looks at, because it tells it how much it would lose if it had to sell the flat at auction.

LTV = loan amount / property value

LTV 80% - the standard, best margins
LTV 90% - acceptable, but with low down payment insurance

Note: value means the bank's valuation, not the price in the contract. If the valuation comes in below the transaction price, the LTV goes up - and you have to make up the difference out of your own pocket.

10% or 20%: let's work it out in numbers

A flat costing PLN 600,000, interest 7.5%, term 25 years, fixed instalments. Two paths:

	10% down payment	20% down payment
Down payment in cash	PLN 60,000.00	PLN 120,000.00
Loan amount	PLN 540,000.00	PLN 480,000.00
LTV	90%	80%
Monthly instalment	PLN 3,990.55	PLN 3,547.16
Total interest (without low down payment insurance)	PLN 657,165.71	PLN 584,147.30
Total interest with low down payment insurance margin +0.3 percentage points until LTV reaches 80%	PLN 669,830.44	PLN 584,147.30
Total amount to repay (loan + interest)	PLN 1,209,830.44	PLN 1,064,147.30

The missing PLN 60,000 of down payment costs PLN 85,683.14 of interest

You do not have PLN 60,000, so the bank lends it to you along with the rest of the loan. The price of that kindness: an instalment PLN 443.39 higher every month for 25 years and PLN 85,683.14 of extra interest (PLN 73,018.41 from the larger loan amount alone plus PLN 12,664.73 for the low down payment insurance).

In other words: for every zloty of down payment you borrow, you give the bank PLN 2.43. That is the real rate of return on saving up a down payment - and no deposit in Poland will beat it.

Low down payment insurance: how it works and what it costs

The name is misleading. It is not insurance for you - it is protection for the bank in case it has to sell the property and its value does not cover the debt. You pay for it, but the bank is the beneficiary.

It used to be charged as a separate premium. Today the standard is a higher margin: the bank usually adds 0.2-0.5 percentage points to the interest rate and keeps that increase until the loan balance falls to 80% of the property's value. Then the margin goes back to standard.

How long does that take? With a PLN 540,000 loan on a PLN 600,000 flat, you have to repay the capital down to PLN 480,000. With fixed instalments at 7.5% the first years are mostly interest, so it takes more than six years:

Margin increase	Interest rate	Instalment	How much more you pay each month	How long the increase lasts	Total cost
+0.2 pp	7.7%	PLN 4,061.07	+PLN 70.52	6 years and 6 months	PLN 8,347.60
+0.3 pp	7.8%	PLN 4,096.52	+PLN 105.97	6 years and 7 months	PLN 12,664.73
+0.5 pp	8.0%	PLN 4,167.81	+PLN 177.26	6 years and 9 months	PLN 21,584.65

Note the paradox: the bigger the margin increase, the longer it lasts. A higher interest rate means a bigger part of the instalment goes on interest, so the capital falls more slowly, so you wait longer for an LTV of 80%. At +0.5 percentage points the increase lasts three months longer than at +0.2.

How to shorten the period of the higher margin

Overpay. Every overpayment goes entirely towards the capital, so it brings forward the moment the balance falls to 80% of the property's value - and then the margin returns to standard. It is an overpayment with a double effect: it lowers the interest and removes the increase.

Keep an eye on the bank. Some banks only lower the margin at the customer's request, after you provide a current valuation. Check in the agreement whether this happens automatically or whether you have to ask for it - and work out the effect in the overpayment calculator.

What can count as a down payment

Source	Will the bank accept it	What to watch out for
Cash / savings	Yes, without reservation	You have to document it with a bank statement. A large payment "out of nowhere" just before the application raises questions
Advance payments made to a developer	Yes	The most common case on the primary market. Confirmation of payments into the escrow account is enough
Deposit paid to the seller	Yes	It must follow from the preliminary agreement and be backed by a transfer confirmation
A plot for building a house	Yes, and often in full	What counts is the valuation, not the price you paid. The plot must be your property and becomes part of the security
A gift from family	Yes	Report it on form SD-Z2 within 6 months - see the warning below
Housing savings book (PKO BP)	Yes, together with the guarantee bonus	The bonus is paid out for specific housing-related purposes. Check the conditions before closing the savings book
Money from selling another property	Yes	The bank wants to see the notarial deed of sale and the money arriving in your account
Another property as additional security	Sometimes	Instead of cash, the bank registers a mortgage on the second property. The risk: you lose both if you stop paying

A gift from family: report it to the tax office

A gift from your closest family (parents, grandparents, siblings, spouse, children - tax group 0) is completely exempt from tax, with no upper limit. But only if you report it to the tax office on form SD-Z2 within 6 months and - in the case of money - receive it by bank transfer, not in cash.

Miss the deadline or take cash in an envelope? The exemption is lost and you pay tax under the general rules. With PLN 60,000 that is several thousand zloty thrown away for lack of one sheet of paper. Bank transfer and SD-Z2. Always.

What can never count as a down payment

A short list, but an expensive one. Money from a loan is not a down payment - it is another debt. This applies to a cash loan, a non-bank loan, a payday loan, an overdraft and a credit card. The bank sees every one of these commitments in BIK (Poland's credit bureau).

A cash loan for the down payment: you lose PLN 47,315 outright

This is the most common mistake with a mortgage and also the most foolish, because arithmetically it cannot possibly pay off. The numbers for a PLN 60,000 cash loan at 12% over 8 years:

Instalment: PLN 975.17. Interest over 8 years: PLN 33,616.37. And now the most important part: that instalment cuts your borrowing capacity (PLN 9,000 net income, 2-person household) from PLN 495,213 to PLN 387,898, i.e. by PLN 107,315.

You borrowed PLN 60,000 for the down payment and lost PLN 107,315 of mortgage capacity. Balance: minus PLN 47,315 - and that is before the bank even asks where you suddenly got the money from. And it will ask.

Bonus: some banks automatically reject the application in this situation, because a fresh cash loan just before a mortgage application is a red flag for scoring. There is no way around it. There is only the way of saving up the down payment.

How to save up a down payment

Since borrowing the down payment costs PLN 2.43 for every zloty, saving it up is the best-paying "investment" available to someone planning to buy a flat. The question is: how much a month and for how long.

Below: a target of PLN 60,000, a savings account or bonds at 5% a year, monthly compounding, payments at the end of each month.

You want PLN 60,000 in	You put aside each month	You pay in from your own pocket	Interest adds
3 years	PLN 1,548.25	PLN 55,737.00	PLN 4,262.85
4 years	PLN 1,131.76	PLN 54,324.48	PLN 5,675.65
5 years	PLN 882.27	PLN 52,936.20	PLN 7,063.53
6 years	PLN 716.30	PLN 51,573.60	PLN 8,426.74
7 years	PLN 598.03	PLN 50,234.52	PLN 9,765.02
8 years	PLN 509.60	PLN 48,921.60	PLN 11,078.97

By putting aside PLN 882.27 a month at 5% you will save PLN 60,000 in exactly 5 years. You will pay in PLN 52,936.20 out of your own pocket - the remaining PLN 7,063.53 comes from compound interest. It is not a fortune, but it is 7 thousand zloty you do not have to earn.

PLN 1,000 a month: PLN 60,000 in 4 years and 6 months

By putting aside PLN 1,000 a month at 5% you will pass PLN 60,000 as early as month 54, i.e. after 4 years and 6 months. The same money under the mattress would need a full 5 years (60 payments of PLN 1,000).

Compound interest bought you half a year. Over a five-year horizon the effect is moderate - because compound interest only really gets going after a decade. We take the mechanism apart in "Compound interest from scratch", and you can plug in your own numbers in the compound interest calculator.

If you are aiming for the full 20%, i.e. PLN 120,000, at 5% over six years you need to put aside PLN 1,432.59 a month. For many people that amount is unrealistic - and this is exactly the moment to admit honestly: a cheaper flat with a 20% down payment is often a better decision than a more expensive one with 10%. Not because that is the done thing. Because that is what the table above shows.

Do not leave your account at zero after paying the down payment

The down payment is not all the cash you need. For a PLN 600,000 flat on the secondary market there are also PLN 18,172-29,826 of loan-related costs: 2% PCC (civil law transactions tax, PLN 12,000), the notary fee, the valuation, bridging insurance and court fees. We break them down to the zloty in "A mortgage step by step".

On top of that, an emergency fund covering 3-6 months of instalments. Someone who paid the down payment down to the last zloty and was left with an empty account reaches for a payday loan at the first boiler breakdown - and is back to square one.

Work it out yourself

Calculator

Compound interest calculator

Enter your target (e.g. a PLN 60,000 down payment), your monthly payment and your rate. You will see year by year when you will have saved the down payment - and how much of it comes from interest and how much from your own pocket.

Plan your down payment

Calculator

Borrowing capacity calculator

A down payment does not increase your capacity - it increases the price of the flat you can afford. Check how much the bank will lend you and add your down payment.

Check your capacity

Read on

A mortgage step by step - nine stages, realistic timescales and a full table of the loan-related costs nobody counts.
How a bank really calculates your borrowing capacity - why the 2.5 percentage point buffer from Recommendation S takes more than PLN 100,000 off your capacity.
Compound interest from scratch - the mechanism that makes saving for a down payment work faster than the mattress.

Calculation assumptions: a PLN 600,000 flat, interest 7.5%, a 25-year term, fixed instalments. Low down payment insurance is modelled as a margin increase of 0.2 / 0.3 / 0.5 percentage points kept until the month in which the loan balance falls to PLN 480,000 (LTV of 80% of the value on the purchase date); after that the interest rate returns to 7.5% and the instalment is recalculated for the remaining term. Savings target: PLN 60,000 at 5% a year, monthly compounding, payments at the end of each month, without the Belka tax (Poland's 19% capital gains tax) and without inflation. Borrowing capacity calculated for a net income of PLN 9,000, a 2-person household, living costs of PLN 2,500, a DSTI of 50% and a 2.5 percentage point buffer. All numbers were calculated with our engine (js/finance.js), the same one that powers the calculators - you can reproduce them to the grosz. Banks differ in the size of the margin increase, how they calculate LTV (some use a current valuation) and their requirements for sources of the down payment. This text is educational and does not constitute lending or tax advice.