A year ago, interest rates in Poland were still at a record low – the main, reference rate, was 0.1 percent. This was the result of the actions of the National Bank of Poland aimed at supporting the economy affected by pandemic lockdowns. NBP started to cut rates in March 2020, from the level of 1.5 percent. – back then it was a historically low level that was kept for 5 years from 2015. Perhaps this made some Poles less afraid of the interest rate risk, also the NBP narrative showed that there was no intention of raising them quickly.
WIBOR is growing, mortgage loan installments are growing
The height of the feet has an impact on the shape of WIBOR. This is the rate at which banks in Poland lend money to each other. It is also one of the elements on the basis of which the interest rate is calculated credits variable interest rate mortgage – such loans constitute almost the entire pool of all mortgages in Poland (there are about 2.1 million of them, repaid by a total of 3.5 million borrowers). The interest rate consists of the bank’s margin, which is fixed and we have it entered in the loan agreement, and the variable WIBOR rate of 3M (three-month) or 6M (six-month).
3M WIBOR just before the start of the rate-raising cycle was 0.25%, and on February 10 it was 3.28%. The amount of WIBOR 6M increased from 0.33 percent. up to 3.75 percent
Freeze WIBOR? “The best help is to control inflation”
Higher WIBOR means higher interest on mortgage loans and a higher monthly installment. For some, this increase is already significant, and most borrowers saw only two or three rate hikes that had just been taken into account – so far there have been five of them (and that’s not all). Moreover, some of those who concluded WIBOR 6M agreements with banks have not noticed a strong increase in installments so far. In their case, WIBOR is updated twice a year and the NBP may have hit the hikes in the period right after the update. Such borrowers must take into account a drastic, cumulative increase (the others simply have it spread over a longer period). In some cases the installment may increase by as much as PLN 1,000, but even with “average” loans, one should expect an increase of several hundred zlotys – already on the basis of what the MPC has done so far (and yet this is the end of interest rate hikes).
There was a voice that maybe the amount of WIBOR should be frozen. Such an idea has recently been described by Marcin Wroński from the Collegium of World Economy of the Warsaw School of Economics in the article for oto.press. He proposed a temporary freezing of WIBOR to calculate the amount of loan installments, e.g. at the level of December 2019. Then, WIBOR 3M was 1.71%, and WIBOR 6M was 1.79%. According to Wroński, the freeze should only apply to loans taken out for the purchase of an apartment for one’s own needs.
Many economists have criticized the idea. The market analyst is also critical nieruchomo¶ci.
– I suffer from such a solution – said Katarzyna Kuniewicz in the Q&A program. – WIBOR in Poland is the rate at which banks borrow money. This is out of government regulation. And I am very glad that it is beyond government regulation – she added:
