Polish mortgage borrowers with zloty loans will soon find bank letters in their mailboxes proposing a move from the WIBOR benchmark to POLSTR. The deadline for signing an annex is 60 days, and although the new rate may look lower at first, monthly payments could eventually rise.
This is part of a wider reform of interest-rate benchmarks in Poland. From 2027, POLSTR becomes mandatory for new loan agreements, and WIBOR will disappear from new offers. Existing contracts can keep WIBOR until the end of 2036, so banks are now starting the transition process for borrowers who already have mortgages.
According to information reported by Fakt, clients will be sent annex proposals to their existing agreements. They will have two months to decide. Jaroslaw Sadowski, analyst at Rankomat.pl and Rentier.io, says the decision is not simple.
– Assessing whether to sign the annex will not be easy. A lower initial rate may prove less favorable once the benchmark levels change – said Jaroslaw Sadowski, analyst at Rankomat.pl and Rentier.io.
Why POLSTR can push rates higher
The Polish Short Term Rate, or POLSTR, is usually lower than WIBOR. That does not automatically mean a lower final loan cost, because the calculation method differs from the old benchmark. Banks can also adjust margins at the same time, potentially wiping out the initial advantage for the client.
Sadowski’s calculations show how quickly a seemingly good offer can become worse. In one example, the interest rate after switching was 5.8 percent at the start, then rose to 5.95 percent after the benchmark changed. If the borrower had stayed with the old rules, the rate would have been 5.85 percent.
– What looks beneficial at first glance may not be in the long run. A cut in interest can turn out to be an increase – said Sadowski.
What happens if a borrower does not sign
Even people who reject the annex will not avoid the change. The new rules are planned to be introduced by law, which means the real question is not whether to switch, but when and under what conditions the move to POLSTR happens.
The transition period for current mortgage agreements can last until 2036. Banks have already begun sending letters, ahead of the mandatory POLSTR in new contracts from 2027.
Źródło: WNP.PL, Fot. Dominik Spalek / Shutterstock
