NBP interest rates: From 5.75 percent to today. What awaits us?

The 5.75 percent level from November 2024 was a long-term foundation of policy, and economists indicate that we will reach the optimal level no sooner than the end of 2026. Borrowers who hoped for a sharp drop in monthly burdens must confront their expectations with the hard geopolitical realities that effectively tie the hands of the Monetary Policy Council. Any attempt at rapid policy easing immediately hits the zloty exchange rate, which makes the reduction process resemble cautious walking on thin ice rather than a decisive change in monetary course.

The mathematics of disappointment: how much actually stays in the wallet?

Many mortgage holders feel cheated when they see headlines about interest rate cuts while there are no noticeable changes in repayment schedules. To understand this phenomenon, one must descend to the level of pure financial mathematics. Let's assume a model mortgage of 500,000 zlotys with a 25-year repayment period and a bank margin of 2 percentage points.

Under NBP rates of 5.75 percent, the loan interest rate (including the margin) is 7.75 percent. In such a scenario, the principal-interest installment is about 3,790 zlotys. If the Monetary Policy Council decides on a cut of 0.25 percentage points, the loan interest rate falls to 7.50 percent. Then the installment is about 3,695 zlotys. The savings? A mere 95 zlotys per month.

It is precisely this less than one hundred zlotys that is the source of frustration. For the central bank, such a change is a move toward so-called economic optimization, but for a household budget, it is an amount that often does not even suffice to cover food or energy inflation. Moreover, banks are very reluctant to revise WIBOR rates downward at the same pace that rates fall. Financial institutions in their calculations take into account not only the current MPC decision, but above all future risks, including geopolitical ones. If the market expects the easing cycle to be slow, banks maintain higher margins, hedging against volatility.

Geopolitics as a brake on WIBOR

WIBOR, the rate at which banks lend money to each other, is closely linked to expectations regarding future monetary policy and the condition of the Polish currency. When news of the escalating US-Iran conflict spread across the world in July 2026, the financial market reacted with an immediate sell-off of emerging market assets. Poland, as a country bordering areas of increased risk, feels this particularly acutely.

The zloty is losing value under pressure, which creates the risk of so-called imported inflation. If we import goods and energy with a weak zloty, prices in stores rise, which automatically excludes aggressive rate cuts. The MPC is in a stalemate. On one hand, we have social pressure for cheaper credit, and on the other, the need to maintain a high cost of money to stop capital flight and currency weakening.

In this context, WIBOR ceases to be merely a reflection of NBP interest rate decisions and becomes an instrument of national risk management. Every tension in the Middle East translates into higher valuations of interest rate futures. Investors assume that in wartime conditions, the central bank will be forced to keep rates higher for longer. This is why installments are not falling as fast as we would expect – the market is pricing in risks that we will not find in official NBP communications.

Autumn 2025: The beginning of a long road

The November 2025 decision, described as the "second autumn quarter," marked the technical start of the monetary policy easing cycle. At that time, the market looked with hope at the first cut in months. However, after just a few weeks, it became clear that this move would not trigger a series of dynamic cuts.

Analyses published after this meeting, including reports from Bankier, pointed to a very cautious approach by Council members. They understood that inflation, although it had slowed down, still had a tendency to return at the slightest demand impulse. Reaching the optimal level for the Polish economy was postponed by experts to the second half of 2026. This perspective, then a year away, became a sentence for borrowers.

For many observers, that decision was purely cosmetic. In retrospect, it is clear that the MPC only wanted to signal that it was not "stuck" in its decisions, while maintaining full control over system liquidity. This was a time when monetary policy ceased to be a tool for stimulating growth and became a tool for survival in an uncertain macroeconomic environment.

Why is the "optimal level" a distant date?

Economists using the term "optimal level" mean a cost of money that does not stifle the economy but at the same time does not stimulate excessive debt among citizens. In Polish conditions, after years of high inflation, this task is extremely difficult.

Forecasts published in April 2026 by Direct Money left no illusions. Even assuming the stabilization of energy commodity prices, the MPC will not dare to return quickly to the days of cheap credit. The reason is prosaic: the Polish economy still shows signs of overheating in some sectors, and the labor market, despite some slowdown, maintains high wage pressure.

High interest rates therefore act as a brake on wage growth. If the MPC lowered rates too quickly, companies would start raising wages even more boldly, which would fuel a price-wage spiral. Therefore, economists, including experts cited by Forbes, point to the end of 2026 as a realistic moment when we will be able to talk about a new equilibrium. Until then, every decision to cut by 0.25 percentage points will be treated as a success, although for the borrower it will be just a drop in the ocean of needs.

Installments that "don't budge" – why does this phenomenon persist?

Reports from December 2025 about loans whose installments do not react to MPC decisions have become a symbol of disappointment. The banking mechanism in Poland is constructed in such a way that banks have significant safety buffers. When interest rates fall, banks do not have to automatically lower loan interest rates for individual clients if their internal risk models indicate the need to secure capital.

Clients look at headlines about NBP rates, and then at their account statements and see no difference. It is frustrating, but consistent with market laws. Commercial banks in Poland, operating in conditions of geopolitical uncertainty (the aforementioned Iran, but also the general condition of Eurozone economies), prefer to maintain higher margins. Savers on deposits gain from this, while borrowers lose. This is a classic mechanism of capital redistribution within the banking system, which is rarely spoken of directly in mainstream media.

Currently, looking from the perspective of August 2026, we know that this asymmetry between MPC decisions and consumer sentiment was built into the scenario of exiting high inflation. Borrowers have become unwitting funders of the financial system's stability. Their higher installments are the price we pay for avoiding sudden currency movements that could devastate the savings of the rest of society.

Financial market versus borrower reality

The financial market prices in the future, not the past. Therefore, even if the MPC makes downward moves, bank margins and market WIBOR rates do not have to follow them at the same pace. This is a bitter lesson for those who counted on a quick return to the days of cheap money. We remain in limbo, where every decision of the council weighs much less than the average bank client would expect.

Financial institutions' forecasts regarding the end of 2026 are not a sentence, but the result of complex econometric models. These models assume that by then, geopolitical tensions will fade and the zloty will regain its strength. However, as the history of recent years teaches, black swans – such as escalation in the Middle East – can ruin the most precise forecasts in a single day.

For the average Pole, this means that the period of cheap money has not returned abruptly. Savers who can still count on stable deposit interest rates are gaining, while borrowers are losing, as their installments are falling slower than the market would expect. The catch lies in geopolitics – every escalation in the Middle East immediately halts the MPC's appetite for cuts to save the zloty exchange rate.

Economy in limbo: conclusions from the road to 2026

Analysis of past quarters shows clearly: the Polish economy has moved from the acute phase of fighting inflation to the phase of long-term management of the cost of money. The stabilization that began back in November 2024 was necessary to avoid the shock that a sudden change in the monetary paradigm would have caused. The Monetary Policy Council adopted a strategy of small steps.

This strategy, although difficult for loan holders, saved us from the worst currency scenarios. In the face of tensions between the US and Iran, any attempt at aggressive monetary easing could have ended in a speculative attack on the zloty. The MPC cannot afford such a luxury. As a result, the adjustment process is not a sprint, but a laborious march spread over time.

For the average mortgage holder, this means no quick relief. Although central banks around the world are making moves, the Polish economy must cut its coat according to its cloth. Economists, analyzing the current path, are in agreement: we will reach the level optimal for the economic climate no sooner than the end of 2026. Optimism is therefore premature.

What this means for you

Questions and answers

Why are my loan installments not falling as fast as NBP rates?

Loan installments depend on WIBOR rates, which react to market expectations, not just current MPC decisions; this process is often delayed in time, and banks maintain higher margins in the face of geopolitical risk.

When can we expect to reach the optimal rate level?

According to the opinions of economists, the optimal level of interest rates will be reached no sooner than the end of 2026.

Does the situation in Iran have an impact on my savings in Poland?

Yes, geopolitical tensions put pressure on the zloty, which forces the MPC to be more cautious in lowering rates, which in turn maintains the attractiveness of bank deposits at the expense of borrowers.

---

*Editorial:* It should be remembered that every borrower should analyze their obligations through the prism of the total cost of the loan, and not just the current installment. The current trend indicates that the waiting period for significant relief will last another several months. Geopolitics remains the biggest variable that none of the members of the Monetary Policy Council controls, which makes all forecasts subject to a high margin of error. The "wait and see" strategy seems to be the only rational approach in current market conditions, where currency security is higher in the hierarchy of central bank goals than the current comfort of mortgage debt holders. From the saver's point of view, the current state of affairs is favorable, as higher interest rates translate into better deposit conditions, which partially compensates for the rise in the cost of living. For debtors, however, this is a time of tightening the belt, with the full awareness that a quick improvement in the situation is not within the reach of current monetary policy instruments. Every decision to cut will now likely be preceded by a detailed analysis of the zloty exchange rate and the situation in commodity markets, which makes the Monetary Policy Council's meeting calendar the most important document for anyone paying off a loan in Polish currency. Regardless of expectations, one should prepare for a scenario in which interest rates remain at levels higher than those we got used to in the previous decade. This is the new normal that we will have to live with at least until the end of 2026. Stability costs, and in the current business cycle, it is paid for primarily by those who decided to take out a loan during a period of low money costs. It remains to observe the market and react to changes at the pace imposed by the MPC.

Sources

Article prepared by the Wiadomości PRO editorial team with the support of artificial intelligence. Facts come from the sources provided above.