Another borrower in PLN may earn another PLN 45. A smaller installment will be paid by people who have 300,000 zlotys to pay over 30 years. Such effects can be brought by the current and for the 4th time in a row interest rate cut by the Monetary Policy Council.
At today’s meeting, in line with market expectations, the Monetary Policy Council lowered interest rates and from Thursday 7 February the basic rate will be 3.75%.
This is good news for all borrowers
Especially as, according to economists’ expectations, this need not be the last cut. The market also expects a further decline in Wibor reference rates, and this indicator is the most important from the point of view of the PLN borrower.
Although due to four subsequent MPC decisions, interest rates decreased by a total of 100 basis points, the Wibor rate experienced deeper drops. The 3-month rate, used in most banks to determine the interest rate, in the period from July 2012 to today has fallen by more than 120 basis points from 5.14% to 3.88%.
Everyone who repays loans in PLN benefits
For an example loan of PLN 300,000, contracted for 30 years, the interest rate decrease by 1.20 pp means an installment lower by nearly PLN 250. Further interest rate cuts and a decline in Wibór will mean further tangible benefits in the pockets of borrowers. The table below presents the amount of the monthly installment from the above example assuming different levels of Vibor.
But the installments will be reduced on different dates. Most banks use 3-month Wibor to determine the interest rate and update interest rates to their clients with such frequency. In a few banks, a 6-month rate is used and a new schedule is generated every six months.
The interest rate decrease applies to every borrower in PLN
In the current reality, the worst situation is for customers who, when taking out a housing loan, chose an interest rate based on a 1-year rate. Only two banks used this type of Wibór and their clients in the current market situation can wait even several months for a lower interest rate and cheaper loan.