Installments will not go down again

The movement in the WIBOR reference index clearly affects the amount of mortgage costs and borrowers can enjoy from November (or rather, from the period when their interest rates are renewed) reduced installments of around PLN 100-130. Expander Advisors calculations for the sample loan (granted in August 2021 of PLN 300,000 for 25 years, at a variable interest rate) show that the current monthly installment is PLN 2,538. In December it was PLN 2,586, and in November it was PLN 2,642 (in August 2021 it was PLN 1,334).

The question is whether WIBOR will continue to fall, providing leeway for borrowers. Unfortunately, experts are not well informed here. “If anything, you can expect a bit of movement. Typically, 3M’s WIBOR is about a quarter of a percentage point higher than the reference level, so the room for a decline, without a change in the MPC’s decision, is essentially exhausted, Turek said.

“It will probably fall a little below 7 percent, but it seems that the current level is very close to where it will remain for some time,” believes Jarosław Sadowski, chief analyst at Expander Advisors.

When the feet start to fall

– WIBOR will remain stable, at a level slightly above the reference rate, until there are clear expectations of a rate cut in three months – also said Karol Pogorzelski, an economist at Bank Pekao. – In my opinion, such expectations may arise in late summer or autumn 2023 – he added.

Pogorzelski claims that the mood may be supported by the global disinflationary trend that has emerged since late 2022. This is about stabilization or even falling prices in commodity markets (eg gas, oil), or lower-than-expected inflation readings in the US or Germany. This gives room, combined with fears of too much economic cooling, to shift the central bank’s rhetoric (from hawkish to more moderate) in key markets, but also in Poland. According to PKO BP analysts, MPC may cautiously start cutting rates in Q3-Q4 2023.

On the other hand, if inflation in Poland turns out to be significantly higher than all forecasts, a return to the interest rate hike cycle is needed.