The grace is written into the contract at signing. Not to be confused with payment holidays — a one-off request to defer an instalment mid-contract (like the Polish government scheme in 2022–2023). Grace is an agreed period from the start — for example the first 12 months you pay just interest of 400 PLN/month, then 24 years of standard 2 300 PLN/month payments.
When it makes sense. Mortgage for building a house: the bank releases funds in tranches as work progresses, and you pay interest only on the drawn amount. Without grace you would pay the full instalment on an unfinished house. New-build flat with a delayed handover: same mechanic. Business investment loan: grace until the investment starts producing revenue.
Grace is not free. Interest accrues on the full principal during the grace, and you are not eating into principal with an instalment. The full cost of the loan rises. Example: 500 000 PLN mortgage over 25 years at 8% RRSO. Without grace: total interest about 700 000 PLN. With 12-month grace: about 740 000 PLN. Grace is comfort today paid for tomorrow.
Frequently asked questions
Grace is planned into the contract at signing. A payment holiday is a one-off mid-contract deferral, usually run under a separate scheme (Polish government 2022–2023 holidays, bank internal programs).
Usually up to 24 months. Construction mortgages can go up to 36 months at PKO BP and Pekao.
The bank looks at the target post-grace payment, not the current interest-only figure. Grace does not „improve" the score; it only affects your current cash flow.