An annuity or a reverse mortgage seem to be a tempting way to save the household budget, but they have their consequences. he transfers all rights to the real estate to a company, most often a mortgage fund, which in return pays him an annuity for the rest of his life. He may continue to live in the house or apartment donated in this way, but he is no longer its owner.
As he notes, although such mechanisms have been operating in Poland for many years, there are still no appropriate legal regulations. Today, contracts concluded with funds are based on the Land and Mortgage Register Act, as well as the Civil Code and Civil Procedure. The industry itself has also established a set of good practices. In turn, legally regulated reverse mortgages, which are a type of loan, are not popular in Polish banks.
How much is the annuity for the apartment? The average amount is not impressive
Mortgage funds associated with the Association of Financial Enterprises presented their market situation in the 2023 report, quoted by Bankier.pl. It shows that the average age of seniors receiving an annuity in exchange for an apartment is 76.6 years, and the average size of the properties donated in this way is 51.7 square meters. The average value of real estate also increased. In 2022 it amounted to 390.6 thousand. PLN, in 2023 already 411.6 thousand. zloty. Mortgage funds manage real estate with a total value of PLN 158.5 million.
Since the introduction of this type of services, i.e. since 2010, a total of PLN 34 million has been paid to seniors, with PLN 4.8 million paid in 2023 alone. Last year, however, the annuity amounted on average to only PLN 1,033 per month, although it is worth noting that in 2022 it was even lower, amounting to an average of just under PLN 680. The exact amount is determined individually and depends, among others, on: on the senior’s age, gender and, above all, on the value of the property. Payments are indexed every year in line with the consumer inflation rate.
Photo illustrative How much is the annuity for the apartment? Photo Piotr Skórnicki / Agencja Wyborcza.pl
Not just an annuity. What is the difference between a reverse mortgage and an annuity?
A lifetime annuity for an apartment is not everything. In theory, a senior can also count on a reverse mortgage, a type of loan from a bank that, in exchange for entering the mortgage, pays a fixed amount in the form of monthly installments or in full. Such a person, as in the case of a life annuity, may live in the property, and 12 months after death, if the relatives do not repay the debt, the property is taken over by the bank. Why in theory? Although the mechanisms, which are very popular in the West, were introduced by law in 2014, so far no bank has decided to introduce such a service to its offer. If you feel like it, vote in our poll below.
Source: Gazeta
Bruce is a talented author and journalist with a passion for entertainment . He currently works as a writer at the 247 News Agency, where he has established himself as a respected voice in the industry.
