Franc exchange rate and loan installments. Calculations

Before 12.00 on Monday, the Swiss Franc PLN 4.5 must be paid over. Aside from the sharp rise in CHF / PLN on January 15, 2015 (known as Black Thursday), this is a record rate when the franc is currently at PLN 5.17.

Taking into account the current situation in the currency market, Expander analyzed the cases of loans in different periods and in francs issued at different rates.

– If Frank’s current exchange rate were PLN 4.5, almost all Frank borrowers would pay the highest installment in history, explains Jaroslav Sadovsky, chief analyst at Expander Consultants.

– An exception was the unfortunate ones who bought the francs needed to pay the installments on the memorable “Black Thursday” in 2015. Then, for a moment, the rate even broke the level of PLN 5, but at the end of the day it dropped to PLN 4.31, and after 2 weeks the rate returned below PLN 4 – he adds. According to the expert, “now, unfortunately, nothing indicates that”.

– Since the onset of the epidemic, the rate has consistently been above PLN 4. This year, at the beginning of June, the PLN was 4.07. Increase to PLN 4.5 PLN 189 has increased our sample loan installments compared to June 2021 – analyst says.

“Such a high exchange rate significantly raises debt in slots,” the expert notes. – For a loan granted in January 2008, the loan increased from the initial 300 thousand, despite almost 14 years of repayment. PLN up to 371 thousand. Zloty. So you can get the impression that this is a loan that can never be repaid – Satovsky points out.

– In fact, debt expressed in francs, however, is declining. In the case of our sample loan, as soon as the loan is repaid, it is 140.9 thousand. Francs, currently owed 82.5 thousand. Franks. However, as the franc exchange rate continues to rise, the amount in the slots is still higher than the opening – he adds.

Jaroslav Sadovsky, The installments of loans in PLN are also increasing, newly issued and repaid over many years. In this case, the reason is the increase in WIBOR charges. Thanks to that, we are approaching the point where the interest rate for some loans in PLN will exceed 5%.

– For example, WIBOR 6M is already 2.02 percent. So if the credit limit is 10 per cent. For own, for example, the interest rate on the loan would be 2.7 percent and 4.72 percent. – Expert reports.

– On the other hand, with higher interest rates, banks are likely to lower their margins on concessions slightly. In the case of “new” loans, up to 5 percent. Maybe we’ve not getting there as fast as it has been in recent years – he explains.

– The installment of the newly issued loan with the above mentioned 4.72% interest rate will be PLN 1,560 for 30 years, for an amount of PLN 300,000. By comparison, at the beginning of October, when the WIBOR 6M was 0.32%, it was PLN 1,268. Installment increased by PLN 291. In addition, the rise in interest rates also has a significant effect on creditworthiness. WIBOR 6M rate increase from 0.32%. Reducing the amount of credit available up to 2.02 per cent to 20 per cent means that someone who could have counted PLN 300,000 at the beginning of October will now receive almost PLN 50,000. PLN less – Satovsky explains.

The expert emphasizes that the installments of “old” loans in slots will also increase, i.e. those already repaid.

– WIBOR 6M is currently the highest after January 16, 2015. Of all the loans granted after this period, the closest may be the highest in history. However, banks that use WIBOR 6M update the interest rate every 6 months, so for some the installment does not increase for some time – he explains.

Jaroslav Sadovsky compared the situation of borrowers in slots and francs.

– In both cases the installments have increased significantly recently. Frankievsky pays the highest installments in history. The loan installment of PLN 300,000 for 30 years was issued in January 2008 and is PLN 2,022. In the case of a similar loan in PLN, the current installment rate of WIBOR 6M would be PLN 1,336. So the difference is huge, however the level of interest rates in Poland will still rise and the installments of PLN loans may be even higher. If the WIBOR 6M, for example, increases by 3 percent, the installment will be PLN 1,435 – writes the expert.

He adds that comparing the amount of installments paid so far is unfavorable to the owners.

– In their case it was 282.9 thousand. Zloty. So far, the person repaying the same loan in PLN has paid PLN 251.9 thousand. Zloty. So Frankovich paid 31 thousand. PLN More. In addition, this difference is growing every month because the loan installments in Swiss francs are higher than in the slots. Also, the loan amount in CHF, after being converted into PLN, is PLN 361 thousand. In the case of credit in PLN, and PLN, it is 202 thousand. PLN – he explains.

Comparison of loans in CHF and PLN since January 2008 for PLN 300,000