* Euro denominated loans replacing Swiss francs
* New mortgages seen rising by half in 2010
By Chris Borowski and Piotr Bujnicki
WARSAW, April 9 (Reuters) - Foreign-denominated mortgages are making a comeback in the resurgent Polish market, although the euro has replaced the Swiss franc as the preferred currency among chastened lenders, an executive at a Polish bank said.
Consumers' addiction to hard-currency loans hit emerging European countries like Poland and Hungary during the global financial crisis, as foreign lenders withdrew funds from local units and local currencies slid.
But with such mortgages remaining cheaper than those in local currencies even at the darkest moments of the crisis last year, new homeowners have remained keen to borrow at least in euros, to the consternation of some regulators.
"We can see a revival on the mortgage market," Jaroslaw Mastalerz, the head of retail banking at BRE Bank, a unit of Germany's Commerzbank, told Reuters in an interview.
"The perspective of a eurozone entry and low interest rates have allowed the euro to take the place of the Swiss franc on the mortgage market. I think the majority of foreign currency loans will be in euros," he said.
The strengthening zloty, which hit 16-month highs against the euro this week, is helping cut the monthly payments for mortgages in foreign currencies. But if the Polish currency eventually weakens and euro zone interest rates rise off record lows, it could mean much higher payments for many homeowners.
Mortgages in francs made up more than three quarters of all Polish housing loans before supply of the Swiss currency nearly dried up on the shrinking interbank market, forcing Polish banks to drop or severely limit such lending.
Forex housing loans, mainly in euros, now make up about a quarter of all new mortgages in Poland, but insiders say their share should continue to rise towards pre-crisis levels.
Poland's financial watchdog has said it may seek to curb foreign currency loans as a last resort, as have regulators in Hungary, but Mastalerz said banks are now more cautious and vigilant in applying stricter standards to consumers seeking to borrow in euros.
BRE, one of the more aggressive players in Polish retail banking, expects new mortgages in Poland to rise by half this year to about 50 billion zlotys, in line with forecasts by the country's banking lobby, Mastalerz said.
The Commerzbank unit sold 100 million zlotys ($34.8 million) worth of new housing loans in each of the first two months of the year and another 170 million in March. In all of last year BRE sold 1.65 billion. ($1=2.875 Zloty) (Editing by Erica Billingham)