Buying a Polish Flat with a Mortgage on It — Is It Safe, and How Does It Work?

You've found the perfect flat, but the księga wieczysta (the land and mortgage register — Poland's public register of property titles and charges) shows it's charged with a mortgage in favour of the seller's bank. Can you still buy it? The answer is: yes, but you need to know how to do it safely.

This article explains how the purchase of a mortgaged property works in Poland, the two main scenarios (paying off the charge from the price, or taking over the loan), and what a buyer needs to watch out for so as not to lose out.

Key rule: A mortgage charge does not automatically transfer to, or disappear for, the new owner. The seller's bank has to give written consent to release the charge once it's repaid. Without that consent, the whole transaction is risky — you could end up having bought a property that the seller's bank then seizes over the seller's unpaid debt.

Can you buy a flat with a mortgage charge on it?

Yes — this is entirely possible, and it happens all the time in Poland. The key is planning it properly and building in the right safeguards.

Two scenarios for buying a mortgaged property

Scenario 1: Paying off the mortgage from the purchase price

This is the most common route. The procedure works like this:

1. Shortly before signing, the notariusz (a civil-law notary in Poland — a public official who drafts and certifies the deed; this is a different role from a UK notary public) contacts the seller's bank and asks how much is needed to release the charge.
2. The bank replies with something like: "To release the charge, PLN 250,000 needs to be paid (capital plus fees and charges)."
3. In the notarial deed (akt notarialny — the formal deed that transfers Polish real estate; a sale isn't legally effective without one), part of the price (PLN 250,000) is paid directly into the bank's account, and the rest goes to the seller.
4. The notary confirms that the bank has acknowledged release of the charge — only then is the sale registered in the land and mortgage register with you as the new owner, free of the mortgage.

Example: - Property price: PLN 400,000 - Mortgage to be paid off: PLN 250,000 - Deposit already paid (zadatek — an earnest-money deposit under Polish law, which, unlike a simple reservation fee, is forfeited or repaid double if a party backs out): PLN 30,000 - Paid before completion: PLN 120,000 (your own contribution) - On completion day: the notary transfers PLN 250,000 to the bank's account, and the remaining PLN 30,000 (deposit) plus PLN 120,000 (your funds) go to the seller.

Advantage: the mortgage is released and you become the owner free of any charge.

Scenario 2: The new owner takes over the mortgage

This is rarer — the bank and you (the buyer) agree that you'll take over the existing loan.

1. You (the buyer) enter into a debt-assumption agreement with the bank.
2. The bank has to agree to this (which is uncommon — most banks would rather lend to a new borrower on new terms).
3. You then continue repaying the remaining loan under the terms of the assumption agreement.

Advantage: you can spread repayment of the mortgage over further years. Disadvantage: taking over a loan is a complicated process, and banks generally prefer to be repaid in full instead.

Protecting yourself as a buyer — a safety checklist

1. Bank consent to release the mortgage

This is essential. Before you sign the preliminary contract:

• The seller must obtain written confirmation from their bank that it agrees to release the mortgage once it's repaid.
• That letter should state: the amount needed to pay off the debt, the terms of repayment, and the date the consent expires (usually 30–60 days).
• Do not sign the preliminary contract without this letter.

2. A clause in the preliminary contract

The contract should state that: - Completion of the notarial deed is conditional on obtaining the bank's consent to release the mortgage. - If the bank refuses consent (which would be unusual), the contract lapses and your deposit is returned.

3. Safeguards built into the notarial deed

The notary should:

• Contact the seller's bank 2–3 days before completion to confirm the final payoff amount.
• On completion day, ensure that part of the price is transferred directly into the bank's account, not to the seller.
• Withhold your registration in the land and mortgage register until the bank has confirmed the mortgage has been released.

4. Formal confirmation from the bank

After the mortgage is paid off, the notary should receive a written statement from the bank (often called a "promise" or "confirmation of repayment") that the mortgage has been repaid in full and released. Only on that basis will the notary register the release in the land and mortgage register.

"Forced" or lingering mortgage charges — the risk for buyers

There's a risk that, after you've bought the property, the seller's bank could still try to enforce the mortgage against you (as the new owner) if the seller had arrears.

This is sometimes referred to as a mortgage charge that no longer reflects reality on the ground. To protect yourself against it:

1. Always buy on the basis of a notarial deed, not a simple written agreement — the notary controls and verifies the process.
2. Make sure that, at the point you're registered in the land and mortgage register, the mortgage charge is no longer showing — i.e. that it has actually been released.
3. Consider title insurance — some buyer-protection insurance policies cover the cost of legal proceedings if a mortgage charge turns out not to have been properly released.

Scenario: the seller is in arrears on their loan

This is a serious problem. If the seller hasn't been keeping up loan repayments, the bank may:

• Refuse to consent to release the mortgage — in which case the transaction falls through (which, from your point of view, is actually the safer outcome — you haven't lost money on a bad property).
• Enforce the mortgage before completion — the bank seizes the property in order to sell it and recover its money.

In either case, if the process is run through a notary and the contract contains the right clauses, you as the buyer are protected — your deposit is returned.

Does the mortgage attach to the property or to the seller?

Article 487 of the Polish Civil Code (Kodeks cywilny) provides that a mortgage charge does not lapse simply because ownership changes hands. In other words, the mortgage stays "with the property", not "with the seller".

The mortgage is released because: - The bank agrees to release it (because it receives the money from the sale price), OR - The notary confirms the seller has paid off the mortgage from their own funds (rare), OR - Banking law provides for automatic release of the mortgage once it has been repaid in full.

Frequently asked questions

Does the mortgage transfer to me if I buy a property that has a mortgage charge on it? Not directly. The mortgage protects the seller's bank — it gives the bank a right against the property if the seller doesn't repay the loan. When the property changes hands, the bank keeps its mortgage right. But, as explained above, the standard purchase procedure releases the mortgage as part of the sale.

What if the bank refuses to consent to release the mortgage? That would be unusual — banks generally want to be repaid. If the bank does refuse, the notary cannot register the transfer, the deal doesn't go ahead, and your deposit is returned.

Do I have to pay off the whole mortgage on completion day? Yes — under the standard procedure. The seller's bank requires full repayment before it will release the charge. Part of the purchase price is paid directly to the bank, and the rest goes to the seller.

Can I take over the mortgage and keep paying it as the new owner? In theory, yes, but it's very uncommon and would require the bank's consent. Banks generally prefer to be repaid in full. If you want to explore this, ask the seller whether their bank would agree to it (unlikely).

What does it cost to release a mortgage charge? The cost is covered out of the sale proceeds — the bank charges fees (sometimes set out in the loan terms) — but these are already factored into the payoff amount the notary calculates.