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If rates exceed the 4% level, the loans will become more expensive by half. And this alternative remains optimistic – Biznes Wprost

The coming quarters may be challenging for many borrowers. Apart from the fact that they, like everyone else, will pay more for food or energy, their pockets will also be drained by increased loan installments. Since October, it has increased by several hundred zlotys, and it is likely that at least two more rate increases are ahead. We write about why the Monetary Policy Council’s decisions on interest rates are translated into the amount of debt in this text.

How will the premium amount change if rates reach 4%?

After three increases, rates are now 1.75%. Typical borrowers who took out a loan in the amount of 330 thousand. PLN for 25 years with a bank margin of 2.62%, in October they paid a premium of 1541 PLN. At the beginning of December, it was already PLN 1891, after another rate hike, the premium jumped several tens of zlotys

Economists warn that next year, the board may even raise interest rates to around 4%, and that remains optimistic, because, for example, Piotr Kalisz, an economist at Citi Handlowy, did not rule out 4.25 in an interview with Interia stated. percent, and MPC member Camille Zubelewicz in an interview with this service a potential level of 4.5 percent.

How much will the loan premium increase if rates reach the 4% level? The journalist at next.gazeta, for example, took a commitment made for 25 years with a margin of 2.30 per cent for 300,000 zlotys. zloty. After the increase, it will be approximately 2,000 PLN, almost half more than it was before the first rate hike.

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The higher the amount to be repaid, the more noticeable the premium increase. Installment loan in the amount of 500.000 PLN (other conditions unchanged) will rise to approximately PLN 3314 from about PLN 2 before increases and approximately PLN 2836 at the current WIBOR level 3M. These are arithmetic models, because every borrower is in a different situation. Those in the best position are those who have already paid off a large portion of their loans and have taken advantage of low interest rates over the past few years. The situation of “new” borrowers who have barely taken out a loan and have already had to contend with rising interest rates is unenviable.

Customers were aware – at least in theory

The October rate hike was the first in nine years. At the time, the MPC was cutting rates at most, and in 2015-2020 they were at the same low level all along. This translated into record cheap loans and it was no secret that some bought an apartment because it “would not be cheaper anymore” (at least when it comes to debt servicing, because real estate prices are constantly rising). Banks are required to provide customers with a simulation of the increase in the amount of debt depending on changes in interest rates, giving hope that people in debt will be aware from the outset that the installment once agreed upon will not be valid for the entire life of the loan.

At the same time, when calculating the creditworthiness of the bank, they had to take into account possible increases in the amount of installments, so that they could not give a loan to a person who earns little and does not have a “promise” at the time of application. This is the theory, because between the moment of applying for a loan and the increase in installments that occurred a few years ago, various events could have occurred in the borrower’s life that negatively affected his financial situation and the new amount of installments would not be able to withstand it without effort.

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Loan installments increased immediately after the interest rate hike. Banks do not have interest rates on deposits