Moving to Poland from Iceland (salary of 6500 pln a month) - can I build a house?

Hi all

I am Icelandic and my wife is Polish. She have lived in Iceland for 15 years and now is the time to move back home to poland.

I got a job and my salary will be 6500 pln a month. We want to build a house in Mazury area.

Can we live and build a house with my salary ?
How is the loan system in poland ? Is it easy to get a loan and are the interest fair ?
What about solarcells on roof of the house ?

Hope someone can help :-)
Regards
Rabbi

Don't even think about it. Not unless you have enough cash to build to a state you can move into it

Ok so it is not easy to have a loan from bank in poland. We wanted to save money to buy little land and then build the house with the help of a bank,

Salaries in Iceland are much higher than in Poland. You should have saved enough money in this 15 years to build a house in Mazury.

Yes thats right but it is way to more expensive in Iceland.
We will have saved about 50000 pln when we move to Poland. For that we want to buy 2000 square meters land in Mazury and then get loan from bank to build the house. We want to build a big house, maybe 500.000-800.000 loan from bank, Is that crazy ???

Of course it is crazy. If you couldn't limit your expenses to save at least half of this amount in 15 years living in the country with over 2 x higher salaries than in Poland, then how are you going to pay it back here?

But you can afford something cheaper:

allegro.pl/listing/listing.php?order=p&string=dom+mazury
otodom.pl/dom-na-wsi-id12805126.html
otodom.pl/dom-letniskowy-na-mazurach-20-km-od-olsztyna-id19360141.html
allegro.pl/dom-nowy-z-siedliskiem-16-ar-na-mazurach-tanio-i3611662111.html

My wife Kasia have lived here for 15 years but I am Icelandic and I have lived here my whole life.
She has an apartment and we go 1 or 2 times a year to Poland for about 5 weeks. It is not so easy to live in Iceland, everything is so expensive. Like the loan on the apartment is 2700 pln a month and the loan on the car is 800 pln a month. Daily spending, food and stuff is about 3000 pln a month. So you see Iceland is no paradise.

We will rent the apartment in Iceland when we move to Poland and the rent will pay the loan + 1000-1500 pln.
The first year in Poland we will have 10000-12000 pln a month but after one year it will be 6500 pln a month.
Here in Iceland everybody take loan for 40 years to buy a house or apartment. Is nothing like that in Poland ?

Many people do. I think mostly in proximity of big cities with better jobs. If 6500 is net then it looks much better. I think that as a foreigner you may be a little discriminated by banks, for example by requirement to finance 30% from your cash and only 70% by loan. Also I think that it's not the best idea to start live in a new country from house building. Live there a little first.

Of course we will live there for 1-2 years first. We will live at her parents house. We have been there all our vacation in Poland and I like very much to be there. In iceland everything is so fast and much stress. In Poland all is so calm and cool. Her parent live in a small town in Mazury area.

I will get 6500 pln in my pocket every month.
Can we not easily live with that amount ?

Thank you so much for your answers.

Give the guy a break.

Even if they had saved some money, due to Iceland catastrophic crash, capital control are in place. You cannot convert the ISK and take it out of the country. .One result is everyone in Iceland invests in property as there is no way and nothing else to invest in so prices have gone ballistic (in ISK, which is non convertible).

However, rising house prices make the inflation figures rise. As all loans in Iceland index based, the debt rises with inflation.As the property rises in value, you have to pay the bank more.

This makes life in Iceland very tough and it will not get better, probably for decades because removing the Capital Controls is very difficult. Nobody will invest in a country that you can't remove your money and is so utterly corrupt. the cost of food etc is also very high due to monopolies by the ruling families and their cronies.

Moving to Poland and earning twice the national average is a much better prospect than Iceland as things will get better not worse.


After tax? you should do quite nicely.

I would forget about building a house, although you can get a loan and use the land as collateral - you won't need any more deposit. I'm not sure that being a foreigner will affect your ability to get a loan, if you work and a a Polish resident you will have to have a years work record. I find it unlikely EU/EEA passport holders can be discriminated against (although Iceland got away with it...) as it would be illegal in EU law.

Building a house will take quite a long time as I think its necessary to leave the house to settle into the ground over winter before finishing it. This year (before the end) there are government help for buying building materials. Loan length is/will be restricted to 25 years.

Poland will next year introduce a FIT (Feed In Tariff) for solar power. Around 1 PLN per KWhr, I heard, but this may change.

You'll need to have lived in Poland for at least 3 years before a bank will even think about giving you a loan.
Also at least a 3 year clean credit history.
But if you own property in Iceland, then you should be OK, since that could be used as collateral.


Are you sure it was Poland? :)
Polish people are the most stressed out in the world man, they get angry if the air pressure changes ;)
Although in the countryside people are a bit relaxed....a bit too relaxed in fairness, i.e very unprofessional in their approach to work. However, it's a beautiful part of the country you're moving too...beware of living with the dreaded mother-in-law though. I wouldn't chance that for all the tea in China :P


Very good money for where you'll be living, that's a decent enough salary to even live in a city, especially if your missus will be working too.

Best of luck with the move, I've heard living in Iceland is quite difficult at the moment, although you've got some really great bands and other artists coming from there, so you might miss the music scene (if you're into it that is), the music scene here is pretty mediocre at best.

But yea, on that wage for a few years and with your missus working too I presume, and your apartment back in Iceland, I really don't see why you won't be able to get a mortgage in a few years.

I doubt that. As you cannot remove money from Iceland, any asset in that country is unusable as collateral outside of Iceland. Also if he has a mortgage on the property, the increasing debt will probably wipe out any part of the asset he may own.

I suspect that no bank would accept a property with a index-linked mortgage as a collateral. Iceland is the only country in the world that has this.

You're going to need 20% in own funds in hand, so for a loan of 800,000 on a 1,000,000 property you'll need to have 200,000 in hand.


Maximum loan length is 30 years or until the client's 60th birthday, whichever is the shorter period.


That's usually a recipe for disaster. As your wife has an apartment, why not live there?

Really? He wouldn't be taking any money out though, just that if he fails his mortgage here they'll get the apartment in Iceland, that would surely work wouldn't it?

Polish bank would make a nice easy profit on that wouldn't they?

But if it's simply not allowed then it ain't gonna happen.

You cannot sell a Icelandic asset and convert the ISK to Euro/PLN, the Icelandic government will not allow you to convert it and/or take it out of Iceland. So a Polish bank would obtain a property that they can't recover any debt from.

Also the Icelandic bank has first dibs on the asset and its debt is increasing every year by the rate of inflation, (an 1million outstanding mortgage with 5% inflation, increases to 1.05million in year 1 then 1.1025 in year 2, 1,16 in 3 etc) so holding on the asset and waiting for the capital controls to go isn't an option either.

You can convert a certain amount out in hard currency but I'm not sure of the amount, for holidays or study abroad.

Cyprus has capital controls as do Argentina, Venezuela, Bolivia

In the 1970's the UK only allowed £50 holiday money when you went abroad.

I was told once (perhaps facetiously!) that all native-born Icelanders know English, except for the taxi drivers around the airport in Reykjavik:-)

What's more of a mindbender (ćwiczenie umyślowe, though not literally of course ^^), a Pole bothering to learn Icelandic or vice-versa?
LOL

20,000 Poles were working in Iceland til 2008, Poland gave Iceland a 100million currency swap agreement to help them repatriate after the crash.

a reasonable good comment on Icelands situation - icelandicecon.blogspot.co.uk/2012/07/q-on-iceland.html

umyS£owe.You are welcome.

Wow thanks for all your comments.
I am just looking forward to move and be a part of this amazing population and beautiful country :-) yes yes Iceland is also beautiful but in a different way.

Thanks all

Regards
Rabbi

Hi Rabbi,

We live near Mazury and have built a house here. I would highly suggest moving here and waiting a few years to make sure you like it and also use that time to buckle down and save as much as you can, go to a bank and have your wife begin to ask how much you would qualify for.

Which area of Mazury are you looking at?

very wise. Let me tell you something... you are one lucky man.

Rabbi, I presume your wife will help you with Polish once you get settled:-)
Unlike in Iceland, you may not find the average person on the street who is able to understand English fluently, except probably in the capital and then mostly in heavily tourist areas.

Fair comment - but not entirely true. Don't forget that there are two variables determining what one can save, hence looking only at the income part without considering the living expenses is not going to produce a true picture of one's saving potential. Yes, the salaries in the Nordic countries have not only much higher minimum salaries, but equally living expenses are way higher than in PL, thus the saving potential is not great, which is what the OP is trying to say.

Best of luck, rabbi!

We are moving close to Elk.
Very beautiful, lakes and nature.

Well we finally completed our house purchase last week.
Everything went well and according to plan except we weren't warned that the tax etc. due had to paid in cash to the notarie. We expected to pay by bank transfer, most unusual but we had a friendly bank manager who with a little persuasion from the lawyer allowed us to take out the required amount from our account even though it was above their threshold limit.

Without revealing too much personal information I hope, we had approved our mortgage application and the money has been transfered to the sellers account.
To give a little hope to the original OP and prove that each situation is different;
We do not live or work in Poland.
We have had a bank account in Poland for under 18 months.
We intend to retire at age 60, so not long to go for us!
Our mortgage (if we want it to run for the full time) will finish when we are in our mid 70's.
We mortgaged about 20% of the purchase price, perhaps not relevant but ours was purely for tax reasons.

Now the fun starts trying to find a reputable builder to add the planned extension.