Borrowers in Poland who were recently told to expect cheaper credit are now being warned about the opposite. Economists at Bank Pekao and ING say the National Bank of Poland may raise interest rates instead of cutting them, lifting the monthly instalment on a 500,000 zloty mortgage by roughly 250 zloty.
The change of mood follows the September meeting of the Monetary Policy Council (RPP), which left interest rates untouched. Until recently the discussion had centred on further cuts, and NBP governor Adam Glapinski suggested in July that a reduction in September was possible if the data allowed. Later economic developments undermined that assumption, and the debate has now turned to hikes.
Pekao points to November
Analysts at Bank Pekao expect the first increase as early as November, when the central bank publishes a new inflation projection. In their reading, the RPP will see inflation settling above the target over a longer horizon.
– We expect that NBP will raise interest rates by a total of 75 basis points in this cycle – the analysts wrote.
ING economists also anticipate tightening, though on a different timetable. They forecast a 50 basis point increase at the beginning of next year and expect inflation to reach 4.2 percent year on year.
– The energy crisis is dragging on and the chances of stabilising interest rates in the coming months are shrinking. We are changing our scenario of stable rates until the end of 2027 to an increase of 50 bp at the start of the year – they stated.
What it means for instalments
The ING analysts recalled that other central banks have already hardened their stance or announced further moves, pointing to the Fed, the ECB and the Bank of Canada on the main markets, as well as to the Czech Republic in the region.
For loans priced off WIBOR 3M, currently at 3.84 percent, the calculation is simple. On a 30-year mortgage of 300,000, 400,000 or 500,000 zloty, with a 2 percent margin added, a 75 bp increase would lift the benchmark plus margin to 6.59 percent.
Monthly instalments would then rise by 145 zloty on a 300,000 zloty loan, by 193 zloty on 400,000 zloty and by 242 zloty on 500,000 zloty. For a borrower carrying the largest of those obligations, the increase comes to about 250 zloty per month.
Źródło: WNP.PL, Fot. Shutterstock/amnat30
