Mortgage or cash: what to choose?

Banks today offer us a very wide range of products. Only, can you really use them in practice? Do you always choose the solutions that are best in your situation? Are your decisions wise? Remember: what knowledge you have is a priority! That is why today we will raise another issue from the “stable” of financial topics: cash and mortgage – how do they differ? Which loan is cheaper: mortgage or cash? I want to take a loan for a house: mortgage or cash? Let’s get started!

Cash and mortgage loans: differences

Cash and mortgage loans: differences


Let’s start from the basics and try to explain to ourselves what is the difference between a mortgage and a cash loan? What are the characteristics of these two different banking products? What is worth paying special attention to? Which loan is better: mortgage or cash?



  • A mortgage is a special-purpose loan. What does it mean? You must use the borrowed money for a specific purpose. In the case of a mortgage, it may be the purchase of a house / flat / building plot, renovation, etc.
  • A mortgage is, as the name implies, a mortgage-backed loan.
  • Mortgage loans are often granted for high amounts and a long repayment period, for example, several dozen years, although much depends on the specific offer of the bank and the individual situation of the potential borrower.
  • If you want to apply for a mortgage, you must have a down payment. Usually a 20% down payment is required, but some banks offer the option of a mortgage with 10% down payment.



  • A cash loan is a loan for any purpose. What does it mean? You don’t have to explain to the bank what you will use the money for, as opposed to a mortgage.
  • Very often, the process of applying for a cash loan is simplified.
  • Payments of money borrowed take place once, while the loan is repaid in installments.
  • The minimum cash loan amount, depending on individual factors, may reach several hundred zlotys, while the maximum, even several hundred thousand zlotys. Therefore, the creditworthiness of the person applying for a loan is very important, among others.

What is more profitable – cash or mortgage?

What is more profitable - cash or mortgage?


We discussed the characteristics of both products, now it’s time to decide what’s better, cash or mortgage? This issue cannot be resolved unequivocally because the choice of credit should be determined by your individual expectations. Think about your requirements, what you want to use your credit money for, etc.

What about financial issues? Which is cheaper: cash or mortgage? Unfortunately, the answer to this question is not as simple and obvious as it may seem. If we compare only mortgage and cash interest rates, the mortgage will prevail because in its case it will be lower. However, it should be remembered that this does not mean that a mortgage will always be cheaper than a cash loan. This is because it depends on a number of factors such as: the sum of the loan, the use of additional products, etc. If, therefore, our main concern is the cost of mortgage and cash, you should carefully compare them.

TO CONCLUDE: A mortgage and a cash loan are two completely different banking products. The choice of a specific one should be dictated by individual needs and expectations, which is why it is worth considering them carefully and thinking about which solution in our case will be the most reasonable and most beneficial option.

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