Poles must prepare for even higher interest mortgage rates than could have been expected a few weeks ago.
The previous increases in interest rates and WIBOR rates have resulted in mortgage loan instalments being 85 percent higher than in the pandemic and by 50 percent against what happened before the coronavirus.
The rates may even grow to around 7.5%, which will mean another jump in instalments. Every year, the customer repays the loan for 300000 PLN will have to pay even 16000 PLN more than in a pandemic.
What was saved during the pandemic does not even slightly compensate for today’s rate hikes
Prof. Henryk Wnorowski, a member of the Monetary Policy Council, said in an interview, that markets must also take into account that interest rates may reach 7.5 percent. “Today we operate in a situation in which we cannot impose any limits, no boundaries. Had it not been for Russia’s aggression against Ukraine, we would probably have already had a cycle of interest rate increases”, believes prof. Wnorowski.
High inflation forces interest rate hikes
In his opinion, there are arguments to end the cycle of interest rate increases at the level of 6.5 percent, but one must take into account the scenario that they will be even higher and may even reach 7.5 percent.
Although the official reference rate of the National Bank of Poland is 4.5%, the WIBOR rates, which are the basis for the interest rate on almost all housing loans in Poland, increased even more and reached 5.5-5.8%.
This suggests that the market expects a further increase in the reference rate. According to some economists (as indicated by Prof. Henryk Wnorowski), it may reach over 7 percent. The reason is rising inflation: the latest data of the Central Statistical Office show that in March the CPI was 11%. year on year and on average in 2022 it will most likely reach at least 10%.
Reference rate at least 5.50 percent
Bank Millennium economists in the Tuesday morning comment wrote that according to them, the NBP reference rate would increase at the end of 2022 to at least 5.50 percent. However, the balance of risk factors for inflation forecasts and interest rates is pointing upwards. It concerns, inter alia, the policy of the European Union towards supplies of hydrocarbons from Russia. A possible reduction in the purchase of energy resources, let alone the embargo, would further increase inflation in Poland .