The franc exchange rate exceeded the level of PLN 4.5 on Monday morning. Maintaining it for most franc borrowers would mean that the next installment will be the highest since obtaining the loan – according to Expander’s calculations. There is also no good information for people who took out their loans in PLN.
Swiss franc. High rate and loan installments
On Monday, before 12.00, the Swiss franc had to be paid over PLN 4.5. This is a record rate, apart from the sharp increase in CHF / PLN on January 15, 2015 (the so-called Black Thursday), when the franc temporarily cost as much as PLN 5.17.
Expander analyzed the cases of loans in francs granted in different periods and at different rates, taking into account the current situation on the currency market.
– If the current exchange rate of the franc remains at the level of PLN 4.5, then almost all franc borrowers will pay the highest installment in history – explains Jarosław Sadowski, chief analyst of Expander Advisors.
– One exception are the unlucky people who bought the francs needed to pay off the installments on the memorable “Black Thursday” in 2015. Then, for a moment, the rate even broke the level of PLN 5, but at the end of the day it fell to PLN 4.31, and after 2 weeks the rate returned below PLN 4 – he adds. According to the expert, “now, unfortunately, nothing indicates it”.
– Since the beginning of the pandemic, the rate has consistently remained above PLN 4. This year, the lowest was at the beginning of June, when it was PLN 4.07. The increase to PLN 4.5 increased the installment of our sample loan by PLN 189 compared to June 2021 – the analyst says.
Loan in francs – debt counted in zlotys is growing
The expert notes that “such a high exchange rate significantly raises the debt in zlotys”. – For the loan granted in January 2008, despite almost 14 years of repayment, the debt increased from the initial 300 thousand. PLN up to 371 thousand. zloty. So you can get the impression that this is a loan that can never be repaid – points out Sadowski.
– In fact, the debt expressed in francs, however, is falling. In the case of our sample loan, immediately after paying the loan, it was 140.9 thousand. francs, and currently 82.5 thousand remain to be repaid. francs. However, as the exchange rate of the franc is rising, the amount in zlotys is still higher than at the beginning – he adds.
Loan installments in PLN also go up
Jarosław Sadowski points out that the installments of loans in PLN are also growing, both newly granted and repaid for many years. In this case, the reason is the increase in WIBOR rates. Thanks to it, we are getting closer and closer to the point where the interest rate on some loans in PLN will exceed 5%.
– For example, WIBOR 6M is already 2.02 percent. So if the loan margin of 10 percent. own is, for example, 2.7 percent, the interest rate on the loan will amount to 4.72 percent. – informs the expert.
– On the other hand, with higher interest rates, there is a chance that banks will slightly lower their margins on offers. In the case of “new” loans, up to these 5 percent. perhaps we will not get there as fast as in the case of those granted in recent years – he explains.
– The installment of the newly granted loan with the aforementioned interest rate of 4.72 percent, for the amount of PLN 300,000, for 30 years, will be PLN 1,560. For comparison, at the beginning of October, when WIBOR 6M was 0.32%, it was PLN 1,268. The installment increased by PLN 291. In addition, the increase in interest rates also affects a significant decrease in creditworthiness. WIBOR 6M rate increase from 0.32 percent. up to 2.02 percent will reduce the available loan amount by as much as 20 percent This means that someone who could count on PLN 300,000 at the beginning of October will now get almost PLN 50,000. PLN less – explains Sadowski.
The expert emphasizes that the installments of “old” loans in zlotys will also increase, i.e. those that have already been repaid.
– WIBOR 6M is currently the highest since January 16, 2015. For all loans granted after this period, the closest may be the highest in history. It should be added, however, that banks using WIBOR 6M update the interest rate every 6 months, so for some the installment will not increase until some time – he explains.
Loans in francs and zlotys – comparison
Jarosław Sadowski also compared the situation of borrowers indebted in zlotys and in francs.
– Installments in both cases have increased significantly recently. The Frankivskis pay the highest installments in history. The loan installment of PLN 300,000 for 30 years, granted in January 2008, is as much as PLN 2,022. In the case of a similar loan in PLN, the installment at the current level of the WIBOR 6M rate will be PLN 1,336. The difference is therefore huge, although it should be added that the level of interest rates in Poland will probably increase even more and the installments of PLN loans may be even higher. If WIBOR 6M increased to, for example, 3 percent, the installment would be PLN 1,435 – the expert writes.
He adds that the comparison of the sum of installments paid so far is also unfavorable for franchisees.
– In their case it is 282.9 thousand. zloty. So far, a person repaying the same loan in PLN has paid PLN 251.9 thousand. zloty. So Frankowicz repaid by 31 thousand. PLN more. In addition, this difference grows every month, because the loan installments in Swiss francs are much higher than in zlotys. Moreover, the debt of the loan in CHF, after conversion into PLN, amounts to PLN 361 thousand. PLN, and in the case of a loan in PLN, it is 202 thousand. PLN – he explains.
Comparison of loans in CHF and PLN from January 2008 for the amount of PLN 300,000
Main photo source: PhotoRK / Shutterstock