Bridge Insurance
Temporary insurance a bank requires on a mortgage loan while the mortgage securing it is still being entered in the land and mortgage register, typically costing the borrower an extra margin surcharge until the entry is confirmed.
Сфера дії: Польща.
Визначення
Bridge insurance (ubezpieczenie pomostowe) covers the gap between when a bank disburses a mortgage loan and when the mortgage securing it is actually recorded in Section IV of the property's land and mortgage register. Because the register is court-maintained and an entry can take anywhere from several weeks to several months to process — longer in busier registry courts — the bank is exposed during that period to lending against collateral that isn't yet formally secured.
Rather than a separate insurance policy the borrower purchases, bridge insurance in practice is usually structured as a temporary increase to the loan's interest rate margin, applied automatically from loan disbursement until the bank receives confirmation of the mortgage entry from the land and mortgage register court. Once the bank confirms the entry, the margin reverts to its standard, lower level, sometimes with a refund or credit for any overpaid period.
Because the surcharge depends entirely on how quickly the court processes the entry — a factor outside either the bank's or the borrower's direct control — the extra cost can vary significantly between transactions even for identical loan amounts.
Приклади
A borrower's mortgage installment includes a temporary 0.1 percentage point margin surcharge for bridge insurance during the first four months after disbursement, until the mortgage entry is confirmed.
A buyer in a slower-moving district court experiences a longer bridge insurance period than a buyer with an otherwise identical loan in a faster court, simply due to how long each court takes to process the entry.
Once the bank receives confirmation that the mortgage has been entered in Section IV, it removes the bridge insurance surcharge from the borrower's next installment.
Як це впливає на купівлю та продаж
Borrowers should ask their bank upfront how bridge insurance is structured and roughly how long registry processing typically takes for the relevant court, since this affects the real, all-in cost of the loan during its first months even though it isn't part of the headline interest rate quoted at signing.
