Sometimes city life becomes overwhelming — or your apartment simply starts to feel too small, with not enough space for everything. Naturally, you begin to think about how to fix that. And often, the most logical — though not the easiest — solution is building your own house.
Almost immediately, the first (and biggest) obstacle appears:
💬 “How much will it cost? I can’t afford it!”
That’s when a mortgage for home construction can come to the rescue.
But how does it actually work? Do you need your own contribution? What does the process look like?
🏗️ Before construction — permits and land
Before you can even dig the first shovel of soil, you need to obtain a building permit.
To do that, you must present both:
- a construction design (project), and
- the plot of land on which you plan to build.
This leads to the first transaction — buying the plot (unless you already own one).
You can buy the plot with your own funds or with a mortgage — but it must be a building plot, as banks can only use such land as collateral.
You have two options:
- Buy the plot first, arrange the building permit, and later take a loan for construction.
- Take a combined loan that covers both the plot and the construction.
In practice, the first option is far more common — because the plot automatically counts as your down payment.
You can calmly choose your project and get your permits.
If you go with the second option, you’ll need to start construction within a set period — most banks require the entire loan to be disbursed within 24 months.
Considering that building permits can take up to 6 months, you’d have only 18 months left to complete the house and settle with the bank — which is why separate financing for the plot is generally safer.
🧾 Applying for a mortgage
Once you have your building permit, the next step is submitting your mortgage application.
In addition to your financial data and information about the plot, you’ll need to include a construction cost estimate (known as “kosztorys budowlany”).
Each bank has its own requirements — some more detailed, some less — and also uses its own minimum cost per square meter, below which it won’t approve your project.
💡 Tip: Before choosing your dream house design, check your borrowing capacity to make sure you can afford to build that specific home.
💸 Loan disbursement — in stages (tranches)
The construction loan is paid out in stages.
Before each installment, the bank will require proof of completed work.
Usually, you only need to submit:
- your construction log, and
- photos of the progress.
However, the bank may also order an on-site inspection, which you’ll have to pay for.
After verifying the progress, the bank releases the next tranche — funds go to your account, so you can manage the spending yourself, as long as you stick to the approved cost breakdown.
If the bank finds that work isn’t completed as planned, it may refuse to release the next tranche until you finish the missing stages using your own funds — and possibly pay for another inspection.
🏠 After completion — converting the loan
Once the entire loan is paid out and construction is finished, you’ll need to submit to the bank:
- proof of completed work, and
- a copy of the occupancy permit (pozwolenie na użytkowanie).
After this, your loan officially changes from a construction loan to a standard mortgage.
From that point on, your only obligation is to make regular payments and keep your home insurance up to date according to the bank’s requirements.
🧩 In summary
Building a house is a longer and more complex process than buying an apartment — not just in terms of construction, but also financing.
Before you begin, it’s essential to:
- check your borrowing capacity, and
- carefully plan your construction budget.
If you’re thinking about building your own home but don’t know where to start — get in touch with us. We’ll help you! 🧡
