Everything you need to know about creditworthiness. Mortgage Creditworthiness Calculator.

One of the first questions future borrowers ask is how much money banks may be willing to lend them. If you are asking yourself the same question, you are in the right place. Our creditworthiness calculator helps you estimate how much financing you can realistically expect, while our expert tips explain how to improve your creditworthiness for a mortgage.

In this article, you will learn:
• What is creditworthiness?
• What affects your creditworthiness?
• How to calculate your creditworthiness?
• How to quickly improve your creditworthiness?
• How bank creditworthiness assessments compare to your actual ability to pay-off mortgage?

What is creditworthiness?

Creditworthiness is the ability to repay borrowed funds together with interest within the agreed timeframe. Before granting a loan, a bank assesses how likely it is that the borrower will repay the mortgage. Based on this assessment, the bank determines the maximum amount it is willing to lend — this amount is your creditworthiness.

Because each bank uses its own calculation methodology, creditworthiness can vary significantly between lenders, sometimes by hundreds of thousands. What factors influence these differences?

What affects your creditworthiness?

Unfortunately, exact methods used to calculate creditworthiness are not publicly available. We do know however, which factors are most commonly taken into account when assessing a borrower’s reliability.

These factors can be grouped into four main categories:

Income

Banks focus on net income. In addition to the amount earned, they also assess income regularity, proper documentation through bank account inflows, and the length of time the income has been received. Most banks calculate an average based on the last 3, 6, or sometimes even 12 months.

While it is true that a permanent employment contract (pl.: umowa o pracę na czas nieokreślony) is the preferred form of earning income for banks, borrowers working under civil-law contracts (pl.: umowa zlecenie, umowa o dzieło) as well as self-employed individuals (pl.: JDG) do qualify for a mortgage. We will discuss banks’ approaches to each of these forms of employment in a separate article.

Monthly living expenses

Amounts allocated to cover household expenses on a monthly basis. Banks usually rely on borrowers’ declarations, but they apply certain minimum thresholds based on minimum living standards, number of dependents, and the place of residence. Even if the declared amount is lower, the bank will adjust it to meet its own minimum level.

Liabilities

Loans, credit lines, guarantees, credit cards, account overdrafts, alimony, leases, and even 0% installment purchases can all reduce your creditworthiness. They decrease the available income and, consequently, the amount you can borrow. It’s important to note that banks focus on the amount of the obligation, not its duration. Therefore, before going to a bank, it’s wise to pay off any outstanding debts possible.

In addition to current debts, past obligations also matter. They affect your reliability in the eyes of the bank, which will check your credit history through the BIK report. If you have a history of late payments (especially over 30 days), it can significantly reduce your creditworthiness for a mortgage or even prevent loan granting entirely. In such cases, it’s advisable to consult a mortgage expert, who can help improve your chances of approval.

Non-financial factors

All other factors that the bank considers which are not directly related to the borrower’s financial situation:

FACTOR	IMPACT
Term of the loan	Extending the loan term may affect your creditworthiness. According to Recommendation S of the Polish Financial Supervision Authority (KNF), banks are required to calculate creditworthiness for a loan term of no more than 25 years. This means that increasing the term from 20 to 25 years can improve your creditworthiness, but extending it beyond 25 years will not. This relationship is reflected in our creditworthiness calculator.
Installment Type	You can choose between equal (annuity) (pl: równe) or declining (pl.: malejące) installments. Equal installments are lower, which results in higher creditworthiness. However, it’s important to remember that equal installments generally lead to a higher total loan cost compared to declining installments (unless you make additional repayments).
Interest type	According to Recommendation S, a bank may apply a lower buffer (income surplus) when assessing creditworthiness if the loan has a fixed interest rate for a certain period. On the other hand, fixed rates are generally (though not always) higher than variable rates. Ultimately, the impact of the interest rate on creditworthiness will be the result of these two opposing factors.
Down payment size	In the context of a down payment, the key threshold is 20% LTV (loan-to-value), which is the ratio of the loan amount to the property value. A lower down payment means a higher interest rate, which translates into a higher monthly instalment and, as a result, lower creditworthiness. Increasing the down payment above the 20% LTV level reduces the required loan amount, but from a creditworthiness perspective it does not have a significant impact.
Number of borrowers	An additional borrower increases the total household income and gives the bank greater confidence in loan repayment, which translates into higher creditworthiness.
Borrower’s age	Most banks verify if any of the borrowers will transition into retirement during the loan repayment period. This usually involves a decrease in income and, as a result, a lower level of creditworthiness.
Number of dependants	Dependants generate additional expenses and therefore reduce creditworthiness. It is worth noting, however, that some banks include the PLN 800+ child benefit as part of the borrower’s income, which in practice may offset the costs associated with having children in the creditworthiness calculation.

Creditworthiness calculator

Now that you know what creditworthiness depends on, let’s calculate it. Our creditworthiness calculator is completely free and does not require any registration or providing personal/contact details. The only information you need to enter is:

• Age – enter the age of the oldest borrower.
• Total monthly net income – if your income varies significantly from month to month, provide an average from the last 3 or 6 months.
• Number of people in the household – include only those who are financially dependent on you.
• Total amount of current monthly loan instalments – combined for all borrowers.
• Total credit card and overdraft limits – again, the combined amount for all applicants.
• Loan term (in years) – we recommend testing different scenarios. Keep in mind that extending the loan term increases the total cost of the loan. Also remember that extending the term beyond 25 years will not increase your creditworthiness.

Click the button to open the calculator in a new window:

At this point, it is important to note that the result generated by our calculator is indicative only and should not be treated as a guarantee of obtaining a mortgage. Creditworthiness depends on many variables and may differ significantly between banks for the same borrower.

Our calculator helps you understand the approximate loan amount you may expect. If you would like a more precise assessment, feel free to contact us. We will be happy to prepare a detailed calculation using banks’ internal systems.

How to quickly improve your creditworthiness?

If your creditworthiness comes out too low, it’s not the end of the road. There are several ways to improve it. Increasing your income or paying off existing loans are obvious and effective strategies, but they share a major drawback — they take time. Time that is often limited when the deadline from a preliminary contract is approaching. What can be done in such situations? There are several steps you can take to boost your creditworthiness in the short term. The best ones are:

• Reduce credit card and overdraft limits to a minimum (but do not close them completely completely. Closing them and obtaining confirmation usually takes at least a month).
• Apply for the loan with a co-borrower. After a year or two, when your creditworthiness improves, it may be possible to remove the co-borrower.
• Extend the loan term to 25 years if your term is shorter.
• Opt for equal (annuity) installments (pl.: raty równe), which are lower compared to declining installments (pl.: raty malejące).
• Consolidate your obligations to reduce their total monthly cost.
• Increase your down payment.
• Consult a mortgage expert, who can recommend additional solutions tailored to your individual situation.

Remember: Extending the loan term, choosing equal installments, and consolidating debts will increase your creditowrthiness, but can lead to a higher total cost of the loan. When considering these steps, carefully evaluate whether they are truly worth it.

Creditworthiness vs actual ability to pay-off your mortgage

Finally, there is something beyond the bank’s calculations you should consider. We recommend every client to ask themselves whether the monthly instalment the bank proposes is truly manageable for you. A mortgage will impact your budget for many years, and you need to ensure it does not reduce your quality of life to an unacceptable level.

Many experts suggest using around 30% of your net income as the maximum affordable instalment threshold. If you want to perform a “dry-run,” try setting aside the equivalent of the monthly payment in your savings account. Do this for a month or two and see how it feels. If your budget struggles, you’ve just protected yourself from making a very poor financial decision. If you manage comfortably, that’s great—the test is passed. More than that, you’ve already started saving additional funds for your down payment :).

Summary

Creditworthiness is a key factor in the mortgage application process. It is always worth to access it several months before you plan to take out a mortgage. After reading this article, you now have an idea of the creditworthiness you can expect at this point. You also now what to do to improve your score.

If you would like a personal assessment covering all particularities of your personal situation, contact us. We’re sure we’ll help you find the best solution.