Interest rates increased for the ninth time in a row. The WIBOR ratios, on which the amount of the loan installment depends, also go up. The six-month WIBOR broke the level of 7 percent, for the first time since October 2004.
The Monetary Policy Council (MPC) raised interest rates by 75 basis points during its June meeting. The first of the current series of increases took place in October 2021. Since then, the MPC has raised rates every month. The main benchmark interest rate rose to 6.0 percent. This is the highest level since June 2008.
– Inflation grows, so are the rates as well, as we announced. It’s a cycle interest rate increases – He said during Thursday’s press conference, Adam Glapiński, president of the National Bank of Poland and chairman of the MPC. At the same time, the head of the central bank signaled that we were approaching the end of the cycle. – We are closer to the end than the beginning, because it was another hike. We are at a fairly high level – said Glapiński.
The next MPC decision meeting is scheduled for July 7.
Interest rates and WIBOR
As a rule, MPC decisions have an impact on WIBOR, which at the same time translates into the amount of loan installments. The interest rate on loans consists of two elements: the bank’s margin and the WIBOR ratio. If a housing loan has a variable interest rate, then changes in WIBOR affect the amount of the installment.
Some banks use the WIBOR 3M (three-month) rate, which means that the mortgage interest rate is updated every three months, counting from the moment the loan is disbursed. In the case of WIBOR 6M (six-month), the interest rate is updated every six months. The above rates include probable increases or reductions in interest rates that may occur during this period.
Both indicators went up on Thursday. WIBOR 6M broke the level of 7%, for the first time since October 2004.
“If anyone in the near future has an interest rate update, they can expect an installment in the area of just over PLN 2,500” – Rafał Mundry, an economic analyst, wrote on Twitter. It is a loan for 25 years, with 300,000 to be repaid. PLN of capital. Mundry noted that “creditworthiness continues to decline rapidly”.
WIBOR 3M is currently at the level of 6.76 percent, and WIBOR 6M – at the level of 7.02 percent.
This means that if we had updated installments in recent days, the June rate hike – and possible July – are already included in it.
How much will WIBOR increase?
Jarosław Sadowski, the main analyst of Expander Advisors, pointed out at the beginning of the week that the quotations of futures contracts suggest that the 3M WIBOR may rise to around 8% in the next 6 months. In practice, therefore, we can expect that in the coming months 3M WIBOR will continue to grow gradually up to this level.
“In normal times, the difference between the 3M WIBOR and the reference rate should amount to approx. 0.25 percent. If we begin to approach the end of the interest rate hike cycle, the aforementioned disproportion should begin to decrease towards the aforementioned 0.25 points. percent ” – informed TVN24 Biznes Bartosz Turek, chief analyst at HRE Investments.
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