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How do raising interest rates affect Poles' savings and creditworthiness?

1. The latest research conducted by IBRiS on behalf of the BFF Banking Group indicates that:

  • Almost 80% of survey respondents expect the economic situation in Poland to worsen. As a result, 66% of Poles limited greater expenses, and 45% - current consumption and basic expenses.

  • A higher percentage of people who indicate that they did not reduce expenditure is observed among men (40- and 60-year-olds), respondents with higher education, and among people with an income in the range of PLN 3,000-5,000 per person.

  • 57% of the respondent think that the safest form of saving is real estate investment. The second choice was gold (35% of responses), followed by time deposits (20%).

2. Interest rates for loans with low down-payment are now the highest since 2006, even though banks have lowered their margins. This is the effect of the recent WIBOR increase triggered by the NBP interest rate hikes.

  • The average interest rate has increased to 9.12%

  • The installment of a typical loan is currently over 45% of the average salary for 2022.

  • This percentage is higher for larger loans in big cities. With a loan of EUR 109k, the monthly installment is about EUR 825, which is 65% of the average salary.

As a result, today twice as many borrowers search the Internet for information on how to lower the installments than in October. According to Google Trends data, the number of such inquiries corresponds to about 10% of total questions about the mortgage, while historically it did not exceed 1%.

The number of Google inquiries about the loan installments ("raty kredyt" and "rata kredyt") in Poland. Source: PIE

Escaping high installments is difficult and involves risks. Conversion of the loan interest to the basis of a fixed interest rate may lead to higher loan installments when the Monetary Policy Council starts lowering interest rates.

3. An additional effect of the increase in WIBOR rates, and thus in credit interest rates, is a sharp reduction in the availability of new loans. This – and the new recommendation of the Financial Supervision Authority, which orders banks to calculate creditworthiness as if interest rates were 5 pp higher than they actually are – has radically limited creditworthiness.

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