Interest rates in the game and now what? Loan installments, savings – we are waiting for your questions to the expert

Inflation has been one of the main economic topics for months – no wonder, prices are rising at a pace unseen by two decades. This rapid growth made the NBP, and more precisely the decision-making body of the Polish central bank, the Monetary Policy Council, started to raise interest rates.

MPC to raise interest rates again?

The Council decided to do so for the first time in October. It was a surprise then. Firstly, because from the earlier comments of the NBP governor (and the MPC chairman) Adam Glapiski it could be concluded that the rate hikes will be expected in November at the earliest. Besides, some experts who were betting on growth assumed that it would be symbolic (“signal”, as one of the MPC members said), at the level of 15 basis points, while the main interest rate increased by 40 basis points. A month later we had a hike again and here the scale surprised as well – 75 basis points.

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In total, the rates rose from 0.1 percent. (historically the lowest) to 1.25 percent. What’s next? According to economists, on Wednesday, December 8, the MPC will raise rates by 50 points. This is the average of expectations, because there are those who expect a smaller rate hike, for example, according to mBank, 25 bp is the most likely. It is also possible, of course, that the Council will surprise everyone again.

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Higher interest rates – what does this mean? How will loan installments increase?

If rates rise to the expected 1.75%, they will be higher than before the pandemic. From 2015, the National Bank of Poland maintained the (then record low) main reference rate at the level of 1.5%. When the first wave of the pandemic spread across Europe, the bank cut it to 0.1 percent in a series of cuts.

Higher rates should lower the price index. However, this impact will not be visible immediately, it will take several quarters. We will see the effect of higher rates sooner elsewhere. Banks are already sending out letters with information about the new amount of mortgage installments.

Why is the bank raising rates now? How will this affect those who have bought apartments on credit and what exactly does the increase in monthly installments depend on? If, how and when will it be felt by others? Maria Mazurek will ask an expert in the Q&A program on Thursday at 12:00 your questions related to the level of feet – and now we invite you to send them to: [email protected]

About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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