At the October meeting, the Monetary Policy Council lowered NBP interest rates as expected. However, the scale of the change seems to be surprising, as the GBC decided to cut rates by as much as 50 basis points, setting the reference rate at historically low level of 2.00 percent. Thanks to this, the installment of the housing loan may drop by about USD 30 for every 100,000 debt.
The interest rate reduction has been expected by the market for many months
In advance, today’s decision was already discounted by the interbank market, where the Wibor 3M rate has fallen by 0.35 pp since the beginning of September, recording the level of 2.23% on 8 October. For borrowers paying back a loan in our currency, it is the Wibor rate that is the most important, because it is this ratio, and not the rate set by the Monetary Policy Council, that determines the interest rate and, consequently, the loan installment.
The current change in rates along with the cycle of reductions initiated in 2012 resulted in a significant reduction in the loan installment. From mid-2012, the Wibor 3M rate fell by 2.9 pp, which translated into a reduction in installments of almost 27 percent. If now the Wibor rate drops exactly by 0.50 pp, compared to the level from the beginning of September, then loan installments will be lower by a few zlotys.
You have to wait for the reductions
Changes in interest rates or do not mean an automatic reduction in interest rates on loans carried out from day to day. In each bank the correction takes place in a pre-planned cycle. Most often this is carried out at the beginning of the quarter, so a large group of borrowers will feel the full effects of today’s GBC decision only in the new 2015. Then, at the beginning of the new quarter, the interest rate on the loan will be reduced and the required installments will also decrease.