Polish mortgage borrowers are about to face a major benchmark decision that may affect their monthly payments for years. Banks will soon send annexes proposing a switch from WIBOR to POLSTR on existing zloty loans, and customers will have just 60 days to respond. Analysts warn that the new offer can look cheaper at first but end up costing more.
The move is part of a wider overhaul of Poland’s financial market. From 2027, POLSTR will be mandatory for new loan agreements, and WIBOR will vanish from fresh offers. Old contracts, however, may continue to rely on WIBOR until the end of 2036.
That long transition period is not slowing down the lenders. According to a report cited by 'Fakt’, banks are already preparing to convert existing mortgage clients by asking them to sign annexes to their current agreements.
Why the lower rate may be a trap
Jaroslaw Sadowski, an analyst at Rankomat.pl and Rentier.io, says the decision requires a careful look at the numbers, not just the headline rate.
– Assessing whether it is worth signing the annex will not be easy. Initially lower interest may after a change in the level of the indices turn out to be less favorable – Sadowski said in an interview with 'Fakt’.
The core problem is the way the interest rate is calculated. POLSTR itself is usually lower than WIBOR, but the bank can simultaneously raise the loan margin, which may eliminate the savings for the customer.
Sadowski’s calculations show how quickly a seemingly good deal can deteriorate. In one case, the rate after conversion started at 5.80 percent, then climbed to 5.95 percent after the indices moved. If the borrower had stayed on the old rules, the rate would have been 5.85 percent.
– What at first glance seems favorable may not be so in the long run. A rate reduction can turn out to be a rate increase – he stressed.
What happens if borrowers do nothing
People who receive the annex have two months to make a choice. This schedule gives them little time to observe how POLSTR behaves in real market conditions.
Stalling will not avoid the switch. The new principles are expected to be introduced by statute, meaning the move from WIBOR to POLSTR is effectively mandatory. The only real question is the exact moment and the terms of conversion.
Borrowers should therefore compare the proposed margin with their existing contract and consider how the new index may react in different rate environments before the 60-day window closes.
Source: WNP.PL, Fot. Dominik_Spalek / Shutterstock
