Opinion of the European Central Bank of 19 December 2023 on mortgage holidays (CON/2023/46)
Date: 2023-12-19
Institutions: European Central Bank
Subjects: financial stability

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 19 December 2023  

on mortgage holidays 

(CON/2023/46) 

Introduction and legal basis 

On 28 November 2023 the European Central Bank (ECB) received a request from the Marshal of the Polish 

Parliament for  an  opinion  on a draft law  amending the Law on crowdfunding for business ventures and 

assistance to borrowers as it relates to mortgage holidays (hereinafter the ‘first draft law’).  

On 1 December 2023 the ECB received a second request from the Marshal of the Polish Parliament for an 

opinion on a second draft law amending the Law on crowdfunding for business ventures and assistance to 

borrowers, again as it relates to mortgage holidays (hereinafter the ‘second draft law’ 1 and, together with 

the first draft law, the ‘draft laws’).  

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and the sixth indent of Article 2(1) of Council Decision 98/415/EC 2, as 

the  draft  laws  relate  to  rules  applicable  to  financial  institutions  insofar  as  they  materially  influence  the 

stability of financial institutions and markets, and the ECB’s tasks concerning the prudential supervision of 

credit  institutions  pursuant  to  Article  127(6)  of  the  Treaty.  In  accordance  with  the  first  sentence  of 

Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 

this opinion. 

1. 

Purpose of the draft laws 

1.1  The Law on crowdfunding for business ventures and assistance to borrowers3 (hereinafter the ‘Law’) 

introduced in Polish law the concept of ‘mortgage holidays’ to alleviate the burden on borrowers with 

outstanding mortgage loans following several increases in interest rates by Narodowy Bank Polski. 

The Law gives consumers with outstanding mortgage loans in Polish zloty (PLN) the right to suspend 

mortgage  payments  resulting  from  one  loan  agreement,  concluded  before  1  July  2022,  for  eight 

months in 2022 and 2023, comprising four months in 2022 and one month during each quarter in 

2023. The only eligibility criteria specified in the Law are that the loan must be denominated in PLN 

and satisfy the borrower’s  housing  needs. To  exercise this right, borrowers must simply submit a 

request notice to their lender, which has no discretion to decline to grant the requested suspension. 

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The ECB understands that on 5 December 2023 the second draft law was withdrawn from the Parliament by the group 
of parliamentarians who submitted it. However, the Marshal of the Polish Parliament has not withdrawn the consultation 
request of the ECB, so this opinion will cover the second draft law. 
Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

Ustawa  z  dnia  7  lipca  2022  r.  o  finansowaniu  społecznościowym  dla  przedsięwzięć  gospodarczych  i  pomocy 
kredytobiorcom (consolidated text: Dziennik Ustaw z 2023 r., poz. 414). 

 
 
 
 
 
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The loan period is extended by the repayment suspension period. During the repayment suspension 

period,  borrowers  are  not  required  to  pay  principal  and  interest  instalments,  although  they  are 

required  to  pay  insurance  charges  linked  to  their  respective  contracts.  The  borrowers’  right  to 

suspend the payment of loan instalments expires on 31 December 2023. 

1.2  The draft laws amend the Law by extending the borrower’s right to benefit from a mortgage holiday 

also in 2024. Under the draft laws borrowers may suspend loan repayments for one month in each 

quarter in the period from 1 January to 31 December 2024. 

1.3  The first draft law also lays down eligibility criteria to limit the scope of borrowers entitled to request 

a mortgage holiday, under which this right is available to any borrower the total amount of whose 

loan did not exceed PLN 400 000 at the time the loan was granted. According to the explanatory 

memorandum accompanying the first draft law, this amount was assessed, based on data from the 

Polish  Financial  Supervision  Authority,  to  correspond  to  the  average  amount  of  a  mortgage  loan 

granted for the purchase of a flat, subject to suspension under the Law.  

1.4 

In addition, under the first draft law, if the principal amount of the mortgage loan was higher than PLN 

400 000 at the time the loan was granted, but not higher than PLN 800 000, suspension of the loan 

repayment  will  also  be  possible  for  a  borrower  for  whom  the  ratio  between  expenses  related  to 

servicing the monthly instalment of principal and interest on the loan and average monthly household 

income exceeds 50 %. As clarified in the explanatory memorandum accompanying the first draft law, 

this solution reflects one of the conditions enabling the borrower to benefit from the assistance of the 

Borrower Support Fund, which is regulated under the Law on support to home loan borrowers in a 

difficult financial situation4, with the difference that the borrower’s income taken into account will be 

their average income over the period of three months preceding the submission of the application for 

a  mortgage  holiday,  and  not  their  income  for  the  last  month.  In  this  respect,  the  first  draft  law 

introduces  the  requirement  for  the  borrower,  when  applying  for  a  mortgage  holiday,  to  submit  an 

appropriate  declaration  of  household  income  and  the  number  of  members  of  the  household 

contributing to the fulfilment of this condition. 

1.5  The  second  draft  law  also  lays  down  eligibility  criteria  to  limit  the  scope  of  borrowers  entitled  to 
request a mortgage holiday, under which this right is available to all borrowers for whom the ratio 

between expenses related to servicing the monthly principal and interest instalment of the loan and 

average  monthly  household  income  in  the  last  three  months  preceding  the  submission  of  the 

application exceeds 40 %. 

2. 

General observations 

2.1 

In March 2023 the ECB issued an own-initiative opinion on the Law5. This opinion focused on the 

impact of the Law on the banking system and financial stability in the euro area, and did not address 

its impact on Poland’s financial stability, banking system or economy.  

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5  

Ustawa z dnia 9 października 2015 r. o wsparciu kredytobiorców, którzy zaciągnęli kredyt mieszkaniowy i znajdują się 
w trudnej sytuacji finansowej (consolidated text: Dziennik Ustaw z 2022 r., poz. 2452). 
See Opinion CON/2023/8. All ECB opinions are published on EUR-Lex. 

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2.2  However, since the present opinion is issued in response to a request from the Marshal of the Polish 

Parliament for an opinion on the draft laws, it is not similarly restricted in scope. 

3. 

Borrower Support Fund 

3.1 

In November 2017 the ECB issued an opinion 6 on a draft law amending the Law on support to home 

loan borrowers in a difficult financial situation and amending the law on corporate income tax 7.  

3.2  The Law on support to home loan borrowers in a difficult financial situation specifies the rules for the 

granting  of,  and  the  conditions  of  use  of,  repayable  financial  aid  to  natural  persons  in  financial 

difficulties with a home loan (hereinafter ‘financial aid’). Financial aid is provided through a State-

owned bank, Bank Gospodarstwa Krajowego, from a special Borrower Support Fund funded by credit 

institutions. The Law on support to home loan borrowers in a difficult financial situation covers any 

home loans that are secured by a mortgage arrangement, regardless of the currency in which they 

were granted.  

3.3  Under the Law on support to home loan borrowers in a difficult financial situation, financial aid may 

be  granted  if:  (1)  when  applying  for  financial  aid  at  least  one  of  the  borrowers  is  an  unemployed 

person; or (2) the proportion of the borrower’s expenses allocated to paying monthly instalments of 

principal and interest on a home loan exceeds 50 % of the borrower’s household income; or (3) the 

monthly household income minus any monthly costs related to the home loan is lower than PLN 1552 

for a single-person household or PLN 1200 per person for a multi-person household (these amounts 

are subject to adjustment every three years) 8. 

3.4  The duration of financial aid is 36 months, and the maximum amount of financial aid is equal to PLN 

2 000 per month, up to a maximum of PLN 72 000 over three years. Persons receiving financial aid 

must start to repay the funds received, at the latest, in the month following the month that marks two 

years since the last tranche of financial aid was paid out. The funds are to be repaid in 144 equal 

and interest-free monthly instalments. However, if the borrower repays 100 instalments without any 

delay the remaining 44 instalments will be cancelled.   

3.5  The  ECB  therefore  understands  that  a  special  financial  support  mechanism  for  borrowers 

experiencing temporary problems in repaying their mortgage loans has existed since 2015, as these 

borrowers can benefit from financial aid from the Borrower Support Fund. Additionally, the funding 

of this support mechanism was increased in 2022 in the Law that introduced mortgage holidays.  

3.6  The ECB suggests that before introducing new solutions that may raise financial stability concerns, 

it may be advisable to first make use of the instruments that are already available. Therefore, due to 

the existence of mechanisms under the Law on support to home loan borrowers in a difficult financial 

situation  to  support  borrowers  experiencing  temporary  difficulties  in  settling  their  liabilities  arising 

from housing loans, the ECB encourages the Polish authorities to carry out a thorough analysis to 

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See Opinion CON/2017/48. 
Ustawa z dnia 9 października 2015 r. o wsparciu kredytobiorców, którzy zaciągnęli kredyt mieszkaniowy i znajdują się 
w trudnej sytuacji finansowej (consolidated text: Dz. U. of 2022, item 2452). 
See Article 3(1), point (3), of the Law on support to home loan borrowers in a difficult financial situation in connection 
with Article 8(1) of the Law on social assistance (Ustawa z dnia 12 marca 2004 r. o pomocy społecznej, consolidated 
text: Dz. U. of 2023, item 901). 

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consider the active use of the Borrower Support Fund. This may be more advisable than extending 

mortgage holidays, which limits de facto the usage of  the Borrowers Support Fund9 and imposes 

additional costs on credit institutions, which have already funded the Borrower Support Fund.  

4. 

Eligibility criteria 

4.1  Granting  concessions,  such  as  payment  holidays,  to  borrowers  facing  financial  difficulties  can 

support financial stability under certain circumstances by, for example, allowing such borrowers to 

recover  from  temporary  liquidity  shortages,  while  enabling  lenders  to  maintain  client  relationships 

and avoid selling collateral at depressed prices 10.  

4.2 

In  this  respect  both  draft  laws  lay  down  specific  eligibility  criteria  to  limit  the  scope  of  borrowers 

entitled to request a mortgage holiday. These criteria relate to the amount of the mortgage loan taken 

out (under the first draft law) or to the ratio between the borrower’s loan repayment burden and their 

average income in the last three months preceding the application for the mortgage holiday (this ratio 

is 50 % for certain borrowers under the first draft law and 40 % under the second draft law). 

4.3  However, the first draft law does not lay down any specific eligibility criteria for mortgage loans whose 

value does not exceed PLN 400 000 in order to limit the scope of borrowers entitled to request a 

mortgage holiday, other than that the loan must be denominated in PLN and satisfy the borrower’s 

housing needs. As previously noted by the ECB, the application of certain targeted eligibility criteria, 

such as linking the right to restructure a loan to the borrower’s actual income position, may be more 

appropriate11. Additionally, governments are equipped with better tools to support the economy other 

than  the  mandatory  restructuring  of  loans  within  the  banking  system,  such  as  directly  supporting 

distressed borrowers (e.g. through the Borrower Support Fund) or compensating banks for losses 

caused by a moratorium in the public interest.  

5. 

Impact of the draft laws on the banking system and on financial stability 

5.1  Widespread  payment  holidays  give  rise  to  financial  stability  concerns.  On  the  one  hand,  where 

borrowers  face  debt  sustainability  problems,  payment  holidays  may  delay  the  recognition  and 

resolution of non-performing debt, which increases its economic cost. On the other hand, if borrowers 

who are able to make payments benefit from a payment holiday, the negative financial impact will 

unduly reduce bank profitability and increase uncertainty. The impact of payment holidays on banks’ 

profitability is further exacerbated by  a scheme under which the repayment period  is extended  in 

accordance with the number of deferred instalments. Under these circumstances, the value of the 

loan decreases due to the non-payment of instalments on it during the repayment suspension period. 

5.2  Reduced bank profitability means in turn that banks have reduced capacity to retain earnings and 

thus to increase the capital needed to absorb losses and back future loan origination. This, together 

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11  

See also the opinion of Narodowy Bank Polski regarding the legislative procedure of the first draft law, published on 
the Polish Parliament’s website at www.sejm.gov.pl. 

See paragraph 3.2 of Opinion CON/2023/8. 
See, for example, paragraph 3.1 of Opinion CON/2015/26, paragraph 3.3 of Opinion CON/2015/32, paragraph 3.2 of 
Opinion  CON/2016/39,  paragraph  3.1.1  of  Opinion  CON/2018/21,  paragraph  3.1.1  of  Opinion  CON/2019/27  and 
paragraph 3.5 of Opinion CON/2021/36. 

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with  increased  uncertainty,  ultimately  limits  prospective  borrowers’  access  to  credit,  including 

mortgage  loans, and could therefore lead  to adverse  feedback loops between the banking sector 

and the real economy. In addition, large losses resulting from payment holidays may threaten banks’ 

solvency 12, particularly if the loan portfolio subject to payment holidays constitutes a large proportion 

of their assets or if their profitability is already low.   

5.3 

In such circumstances, uncertainties arising from the impact of the draft laws on credit institutions 

may potentially decrease their franchise value. Consequently credit institutions may face increased 

difficulty in attracting investors in respect of the potential raising of equity or issuance of bonds to 

meet  capital  requirements  and  minimum  requirements  for  own  funds  and  eligible  liabilities.  Had 

banks known in advance that such a change to the legislation affecting their contractual agreements 

with borrowers would be made, they could (and most likely would) have protected themselves by 

charging higher mortgage interest rates or, in the last resort, not lending at all. This means that the 

draft  laws  not  only  allow  mortgage  borrowers  a  payment  holiday,  but  that  borrowers  may  in  fact 

receive a financial transfer from their lenders 13. 

5.4  Additionally, the ECB has pointed out in several opinions that the ability of financial institutions to 

effectively  manage  credit  risk  depends  on  a  reliable,  predictable  and  stable  legal  framework  that 

adequately  balances  the  interests  of  both  the  creditor  and  the  debtor 14.  Widespread  payment 

holidays  that  disregard  the  actual  financial  position  of  the  relevant  debtors  may  contribute  to 

increasing moral hazard among debtors, who may assume that such holidays will be extended and 

adjust their behaviour accordingly. 

5.5  The  Polish  authorities  are  therefore  invited  to  consider  more  targeted  eligibility  criteria  for  the 

application of future mortgage holidays to limit uncertainty and risks to financial stability, particularly 

under the first draft law. In addition, as indicated above, the ECB suggests that, before introducing 

new solutions, it may be advisable to first make use of the instruments that are already available, 

such as the Borrowers Support Fund. 

5.6  Several  systemically  important  euro  area  banks  hold  significant  Polish  mortgage  loan  exposures. 

Therefore,  extended  mortgage  holidays  as  provided  for  in  the  draft  laws  may  have  negative 

consequences for financial stability in the euro area, as well as in Poland15.   

This opinion will be published on EUR-Lex. 

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15  

See paragraph 3.3 of Opinion CON/2023/8. 

See paragraph 3.3 of Opinion CON/2023/8. 
See paragraph 2.4 of Opinion CON/2010/8, paragraph 2.4 of Opinion CON/2012/40, paragraphs 2.1.1 and 2.2.3 of 
Opinion CON/2018/13, and paragraphs 2.3 and 3.1.4 of Opinion CON/2019/9. 

See paragraph 3.11 of Opinion CON/2023/8. 

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Done at Frankfurt am Main, 19 December 2023. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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