Down Payment (Own Contribution)
The portion of a property's price a buyer funds from their own resources rather than through a mortgage loan — the mirror image of the loan-to-value ratio, and the practical minimum cash a buyer needs before making an offer.
Сфера дії: Польща.
Визначення
Own contribution (wkład własny) is the buyer's share of a property's financing that isn't covered by the mortgage — if a bank finances 80% of the price (an 80% LTV loan), the buyer's own contribution makes up the remaining 20%.
Under the Polish Financial Supervision Authority's Recommendation S, most banks require a minimum own contribution of around 20% for a standard mortgage, though loans requiring only about 10% own contribution are available if the borrower takes out low-cash-contribution insurance covering the bank's added risk on the uninsured portion.
Own contribution doesn't have to be entirely cash savings — some banks accept a portion in the form of, for example, an existing plot of land the borrower owns, or funds already paid to a developer under a reservation or preliminary agreement, though the specifics vary by bank.
Приклади
A buyer purchasing a 500,000 PLN apartment needs at least 100,000 PLN in own contribution to qualify for a standard 80% LTV mortgage.
A first-time buyer with only 50,000 PLN saved takes out a mortgage requiring just 10% own contribution, accepting a low-cash-contribution insurance premium in exchange.
A buyer already owns the land a house will be built on, and the bank credits its value toward the required own contribution for the construction loan.
Як це впливає на купівлю та продаж
Buyers should calculate their available own contribution before house-hunting, since it — together with their creditworthiness — sets the realistic price ceiling for what they can actually buy. A seller negotiating with a buyer relying on the minimum 10% own contribution should factor in the slightly higher appraisal and underwriting risk that comes with a near-90%-LTV loan.
