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Friday, December 8, 2023

Switzerland, interest rates. Swiss franc borrowers will pay more, loan installments the highest in history – calculations by Jarosław Sadowski

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The main interest rate in Switzerland remains unchanged. The Swiss National Bank (SNB) surprised the market with its decision, which resulted in a significant weakening of the Swiss franc (CHF). However, franc borrowers must take into account an increase in monthly installments. The calculations were prepared by Jarosław Sadowski, chief analyst at Expander Advisors.

On Thursday, the Swiss National Bank decided to keep the main interest rate at 1.75%. The decision surprised analysts who expected an increase of 25 basis points. As a result, we observe a weakening of the Swiss franc.

– Lack interest rate increases in Switzerland and the drop in the CHF exchange rate to PLN 4.78 is, of course, good news for people repaying loans in this currency. Unfortunately, the next installment will be the highest in history, emphasized Jarosław Sadowski, chief analyst at Expander Advisors.

Data from the Credit Information Bureau show that in 2022 the number of active Swiss franc loans decreased by nearly 46.5 thousand. to approximately 342 thousand

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Franc loan installments

The analyst’s calculations show that in the case of a loan of PLN 300,000 for 30 years, granted in January 2008, the monthly installment will be PLN 2,561. For comparison, in January this year it was PLN 2,298, i.e. PLN 263 less. The difference is PLN 1,011 if we take into account the installment amount from January 2008, i.e. after the loan was launched.


– Record installment amounts, of course the effect of the still high exchange rate and previous interest rate increases. The SARON 3M rate takes into account the interest rate increases made in Switzerland. The interest rate on CHF loans is still rising, which is the result of the increase in June this year – explained Sadowski.


The Swiss franc, despite Thursday’s weakening, is nearly 5 cents more expensive than at the beginning of this year. Around 10.20 a.m. you had to pay PLN 4.78 for this currency.

“Interest rates in Switzerland remain at the level from the period of greatest popularity of loans in francs, which was in 2005-2008. Over 560,000 such loans worth over PLN 100 billion were granted then. However, a huge change in the value of the Swiss currency became a problem. Over a dozen years “ago, the average franc exchange rate was approximately PLN 2.50. Currently, it is PLN 4.78 (85% higher than the average exchange rate for taking out a loan in CHF), and a year ago it broke records, exceeding PLN 5.10,” he pointed out in the comment by Bartosz Sawicki, analyst at cinkciarz.pl.

Main photo source: Shutterstock

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