The Monetary Policy Council did not change interest rates in June. This was not a surprise, given the unexpectedly low inflation reading in May, at 3.1% year on year. The risk of significant interest rate increases in the coming months is also declining.
FRA futures still indicate that within the next six months the WIBOR 6M rate may rise from its current level of 3.94% to 4.26%. However, it should be emphasised that as recently as 19 May, they were pricing in an increase to 4.64%. According to calculations by Rankomat.pl, if the forecast materialises and WIBOR 6M rises to 4.26%, the instalment on a PLN 500,000 mortgage taken out for 30 years would increase by PLN 113.
The impact of the war in the Middle East is most visible not in the interest rates on variable-rate loans, but in newly granted fixed-rate mortgages. These loans have recently been enjoying greater popularity. The level of fixed interest rates depends on IRS 5Y quotations, which rose sharply after the conflict began, especially in May. On 19 May, they reached 4.79%. A further increase would create the risk that fixed mortgage rates could exceed 7%.
Fortunately, the quotations have since fallen and currently stand at 4.41%. This is still significantly higher than the 3.7% recorded in February this year, but noticeably lower than 4.79%. There is therefore a chance that, if the trend continues, the average fixed interest rate in mortgage offers will move down towards 6%. At present, it is around 6.5%. For now, however, it remains clearly higher than the average variable rate, which is approximately 5.8%.
As for loans that are already being repaid, the period of falling instalments is coming to an end. Some borrowers with variable-rate loans based on WIBOR 6M may still see a decrease in their instalments. However, these will be minor changes. Six months ago, the rate stood at 4.04%, compared with 3.94% today. After the interest rate update, the instalment may therefore fall by around PLN 32.
Rankomat is one of Poland’s largest online financial and insurance comparison platforms, operating since 2008. The platform enables users to compare offers for motor insurance, including third-party liability, comprehensive cover and accident insurance, as well as property, travel and health insurance. It also allows users to compare financial products such as loans and leasing.
The website works with numerous insurance companies and financial institutions, enabling users to quickly compare terms, prices and the scope of protection, and then conclude a contract online.
Rankomat belongs to the international NCI group, Nexus Capital Insurance Services Group, which operates financial and insurance comparison platforms in various European countries.
Disclaimer: The information contained in this publication is for informational purposes only. It does not constitute financial advice or any other type of advice, is general in nature and is not addressed to any specific recipient. Before using the information for any purpose, independent advice should be sought.
Source: CEO.com.pl
