January brought a very serious change regarding the interest rate credits Living. Its main component – LIBOR – I am clearly declining, which began in the last weeks of last year. If that wasn’t enough, the market has not only stopped thinking about interest rate increases, but is also starting to wonder when the cuts will come. If these predictions start to come true, it will be good news for current and future borrowers. Not only do lower interest rates mean lower installments, but also easier access to loans.
The LIBOR rate is falling and it is expected to fall further. Loan payments will fall with it
At its peak, that is, at the beginning of November 2022 LIBOR In the three-month (3M) issue, it’s listed at more than 7.6 percent. The index level was quite high due to the fact that the market was anticipating more interest rate hikes by the MPC. However, this will not happen. As a result of the lack of increases, on January 10, 2023, WIBOR 3M was already listed at the level of 6.96%. This is the lowest value of this indicator since the second half of June 2022. From the point of view of borrowers, a decrease in interest rates credits by just over 0.6 percentage points. It could mean a drop in premium of about 5 percent, but also a similar increase creditworthiness.
3M LIBOR is declining Source: Stooq.pl
Not only that, the interest rate contracts, which show what may happen to 3M WIBOR in the coming months, indicate that this percentage may drop to about 5.5-6% in the next 12 months. – Bartosz Turic, Senior Analyst at HRE Investment, emphasizes in his analysis. This is important from the point of view of variable interest rates on home loans. This is because it is calculated by adding a margin to the WIBOR (usually in the 3M or 6M version). “If WIBOR 3M actually drops to about 5.5-6%, then loan payments paid today could drop by another 10%. And from the point of view of loan availability, such a change could mean an “improvement” of creditworthiness even more than 10%.
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However, futures quotes are also important from the point of view of interest rates on cyclically fixed rate loans. For example, the basis for setting the interest rate on 5-year fixed-rate loans should be the IRS in the 5-year (5Y) version. The prices of these contracts have also dropped significantly in recent days. On the morning of January 10, their prices were down 5.2 percent. This is the lowest since March 2022. This is important because IRS quotes should allow banks to offer loans at a fixed interest rate of about 7-8 percent. every year. This is lower than it is today, the expert notes.
Will WIRON replace WIBOR in loans?
However, this is not the end of the changes that may lower interest rates on loans in 2023. From the point of view of people who are just thinking about getting a loan, the announcement of the provision of loans based on WIRON in the offer of banks is also important. It is a pointer to replace the currently used WIBOR. On January 9, WIRON 3M was trading at 6.23 percent and WIBOR 3M at 6.96 percent. On this particular day, the difference between those percentages was 0.73 percentage points. Although it may melt in the following weeks, available data from April 2019 shows that WIRON 3M is almost always listed below the corresponding WIBOR, and the average difference between these indices so far has been about 0.5 percentage points.
“If banks start making loans on the basis of WIRON, the interest rate on such debts may be lower than on loans on the basis of WIBOR – unless, of course, the banks decide to increase their margins. Again, it is worth adding that a decrease in the interest rate by 0.5 percentage points could mean a premium 3-5 percent lower and a corresponding increase in creditworthiness “- explains the principal analyst at HRE Investment.
Wages must be increased. The creditworthiness of Poles will also increase
However, not only the interest rate on loans is important for the further development of creditworthiness of Poles. What happens to our salaries is also not without significance. These are set to grow in 2023. According to the latest inflation and GDP forecasts prepared by analysts NBP In 2023, salaries in Poland will increase by about 12% on average. This can translate to more than 10%. Creditworthiness increased in the current year alone – expert estimates.
Will it be easier to get a fixed installment loan?
However, it does not end there. In recent days, there has also been information that facilitating access to loans is also being considered by the KNF. The bureau reported an idea to reduce the buffer to raise interest rates (now 5 percentage points). Changes to fixed rate loans must be applied periodically. Let us remind you that this buffer is used to determine the interest rate on a loan that would be charged to a potential borrower in the event of a black scenario. That is, for today’s current interest rate bank You should add 5 percentage points and check if the borrower can afford such a loan.
However, there is a proposal on the table to halve the buffer currently used to raise interest rates in the case of 5-year fixed-rate loans. Further, in the case of fixed rate loans for longer periods, the reserve may be reduced. In practice, halving the reserve may mean that creditworthiness will rise by 15-20%.
The government announces the cheapest loans in history
Rebuilding the creditworthiness of Poles is a prerequisite for the success of the programme.The first apartmentAs part of that, the government plans to provide people without an apartment with a very cheap loan (with an interest rate of about 2%). However, in order to take advantage of the advantages of this solution, you must first wait for the actual launch of the program (planned for the beginning of the third quarter of 2023) and take on debts to the bank, because in order to obtain a preferential loan, you will not only have to fulfill the requirements of the program, But they also have creditworthiness.
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“It is clear that not all of the previously mentioned positive changes have to become a reality. However, if we do, the average creditworthiness could reach Dec By 2023 to increase by up to 40-50 percent. It would roughly mean rebuilding creditworthiness from before by increasing the interest rate, albeit at a higher level of premium.
However, this is an optimistic scenario. It may also turn out that the geopolitical situation or stagnation may lead to negative effects from the point of view of the people who dream about their four corners. However, from today’s point of view, there is no shortage of premises that may speak in favor of improving our situation. In this regard, the beginning of this year brings us more optimism compared to the beginning of 2022.
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