Interest rates in July 2026: Will loan installments increase?

In brief

The Monetary Policy Council kept interest rates unchanged in July 2026.
The escalation of tensions between the USA and Iran remains the main factor preventing further rate cuts.
The lack of changes in the RPP's decision means the stabilization of loan installments for holders of variable-rate loans.

July RPP decision: Stabilization in the face of uncertainty

During its July 2026 meeting, the Monetary Policy Council decided to keep interest rates at their current level. For millions of Polish borrowers, this is a clear message: the direct costs of debt servicing remain stable. There was no surprise that some analysts were quietly hoping for, but there was also no sudden move that could alarm the real estate market.

This decision was made at a specific moment. July 2026 brought an intensification of the conflict between the USA and Iran, which was immediately reflected in financial market quotations. The zloty came under strong pressure, reacting to geopolitical turbulence. Observing these movements, the Council members concluded that in the face of such high external uncertainty, any easing of monetary policy would be too risky a step.

In practice, the RPP opted for a defensive variant. Instead of attempting to stimulate the economy with cheaper money, it preferred to secure the exchange rate against potential capital flight. Investors who were counting on rate cuts were left disappointed. For a mortgage holder in zlotys, July therefore brought no change in the amount of the monthly installment. The status quo, although predictable, shows how much Polish monetary policy is currently a hostage to events in the Middle East. In July, the Council did not want to take risks, choosing stabilization instead of experiments. This approach cooled the mood in the banking sector, where more courageous signals regarding the interest rate path for the second half of the year were expected.

Geopolitics and the Polish economy: Why is the RPP holding back?

During its July meeting, the Monetary Policy Council did not decide to adjust interest rates, choosing a wait-and-see approach. However, this move is not due to a lack of ideas for the economy, but rather to the real threat coming from the Middle East. The escalation of the conflict between the USA and Iran, which dominated economists' agendas in the first two weeks of July, effectively froze the enthusiasm for monetary easing in Warsaw. The Council members clearly concluded that in the face of such high international uncertainty, any move would be premature.

The international situation directly affects two key parameters for the Polish zloty: inflationary pressure and the exchange rate. The tension between Washington and Tehran is not just headlines in the press; it is primarily a real risk of rising energy commodity prices, which for Poland—a net importer of fuels—means a potential pro-inflationary impulse. The RPP cannot afford a technical error, because weakening the zloty at a time when financial markets are reacting nervously to geopolitical risk could only worsen the situation.

For the average borrower, this conservative stance means the stabilization that the household budget needs so much. No changes mean no surprises in repayment schedules, although this convenience is paid for by a long-term freezing of money costs. The market, which in June was still counting on signals regarding possible easing, must now come to terms with the fact that the foreign policy of the USA and Iran has become more important for mortgage installments than local economic indicators. This dependence shows how much the Polish zloty remains a hostage to global tensions. If the conflict does not subside, the RPP may be forced to maintain this defensive course much longer than originally assumed in the forecasts for the second half of 2026.

Evolution of interest rates: From autumn cuts to today

The current stabilization in the Monetary Policy Council's decisions is a clear slowdown of the optimistic trend that was emerging at the end of the previous year. Borrowers who, just a few months ago, were counting on systematic, quarterly installment drops, must face a new reality. The market has stopped reacting to expectations of cuts, and the attention of decision-makers has shifted from fighting inflation to putting out fires caused by the unstable geopolitical situation, including tensions between the USA and Iran.

The history of the RPP's recent moves shows how quickly sentiment can change. The autumn of 2025 was a period in which the Council provided real relief to Poles' wallets, deciding on concrete cuts. At that time, the mood was definitely more dovish, and every downward move was treated as the beginning of a lasting trend.

As a reminder, the key points of that turning point are:

November 2025: The Monetary Policy Council officially lowered interest rates, which was the first clear signal of monetary policy easing after a long period of restrictions.
Second stage of autumn cuts in 2025: Confirmation of the chosen path, which convinced the markets of an upcoming series of money cost reductions.

Those decisions from November 5, 2025, became a reference point for analysts. Back then, the market breathed a sigh of relief. Today, the enthusiasm has faded. Instead of further drops, we received a message about keeping rates unchanged, which in practice means that debt servicing costs have been frozen at the level from a year ago. The situation resembles a state of suspension. The zloty is under pressure, and any further monetary policy easing in the face of global conflicts currently seems an unlikely scenario. Borrowers have entered a waiting phase, in which the lack of hikes is treated as the only possible consolation.

Borrowers in limbo: What about the installments?

In July 2026, the Monetary Policy Council made a decision that means predictability for millions of Poles paying off mortgages. Interest rates remained at an unchanged level. The lack of movement from decision-makers is a signal to the market that current debt servicing costs will not change suddenly. The direct costs of mortgage loans therefore remain stable, which allows households to plan their budgets based on already known installment amounts.

In practice, this means that the WIBOR index, which directly affects the interest rate of most loan agreements, did not receive an impulse to rise. When the RPP maintains rates, banks have no basis for sharply increasing margins resulting from money costs. This is good news for those who were anxiously following reports on geopolitical tensions, including the escalation in Iran, which as early as July raised concerns about inflation and pressure on the zloty. The market priced the Council's decision as neutral.

However, stabilization is not synonymous with the cut that many have been hoping for for months. Loan installments remain at a level that is a noticeable burden for many families. Although the lack of hikes is a positive scenario, it does not change the fact that borrowing costs remain high in relation to earnings from before the rate hike cycle. Borrowers who were counting on a quick breather in the form of lower monthly obligations must arm themselves with patience. In July, the RPP clearly opted for the status quo, prioritizing caution over market stimulation. Poles' wallets have breathed a sigh of relief, but real savings will still have to wait.

Zloty under pressure: Foreign exchange market reaction

The Monetary Policy Council's decision in July 2026 to keep interest rates at their current level did not provide investors with the long-awaited impulse for a clear strengthening of the national currency. The zloty has been under clear pressure since the beginning of the month, and the market valuation of our money remains a hostage to external factors over which domestic decision-makers have negligible influence.

The main burden for the zloty's exchange rate remains the growing geopolitical uncertainty. The situation between the USA and Iran, described in industry analyses as an escalation of conflict, effectively cools the enthusiasm of foreign capital for investing in emerging markets. In such conditions, investors instinctively flee to so-called safe havens, such as the dollar or the Swiss franc, abandoning higher-risk assets. The Polish currency, despite solid economic fundamentals, is losing in this race.

The lack of movement from the RPP regarding interest rates fits into the wait-and-see strategy, but for the exchange rate, it is a double-edged sword. On one hand, the stabilization of money costs prevents sudden fluctuations in the credit market and ensures predictability for borrowers' wallets, which is good news for mortgage holders. On the other hand, the lack of a clear hawkish signal from the Council means that the difference in profitability between Polish bonds and instruments from developed countries does not encourage buying the zloty. The foreign exchange market is currently pricing in the status quo rather than any change in monetary policy in the coming months.

For a mortgage holder, this means stabilization of installments, at least in the short term. However, from the perspective of the zloty's exchange rate, as long as tensions in the Middle East do not subside, the national currency will be doomed to a defensive stance. Investors today are not looking for profit opportunities in Poland from interest rate differentials, but for a safe place for capital, and in the face of global turmoil, every signal of stability—even one from the RPP—is received by the market with reserve.

Outlook for the end of 2026

In July 2026, the Monetary Policy Council kept interest rates unchanged, which means that direct mortgage costs remain stable. This decision, made in the shadow of growing geopolitical tensions between the USA and Iran, extinguished the market's momentary expectations for a possible easing of monetary policy. Investors who were counting on a quick return to the rate-cut cycle must arm themselves with patience.

The direction in which the RPP will head in the coming months, however, raises considerable controversy. Analysts' expectations regarding future Council meetings are currently sharply divided, and the debate has shifted from a technical level to security policy and the zloty's exchange rate, which has come under clear pressure. There are many indications that no sudden moves in the interest rate tables should be expected by the end of the year.

Comparing the current situation with available analyses, it is worth noting several important points:

Interest rate forecasts from April 2026, prepared by Direct Money analysts, assumed a much milder scenario than the one we are facing today. At that time, a faster downward path for the cost of money was assumed, which, with the current escalation of tensions in Iran, has become largely outdated.
The market consensus currently suggests that RPP decision-makers will "wait and see." Analysts' expectations indicate a high probability of maintaining the status quo until the fourth quarter, unless inflation surprises negatively, forcing a reaction.
The stabilization of loan costs is a breather for households, but not a signal for optimism. The lack of cuts means that the installment will remain at a high level, which has already been felt in many household budgets for months.

For the average borrower, this means one thing: no more dreams of cheap loans this year. The RPP clearly prioritizes currency stability over stimulating the economy with cheaper money. The question remains how long this "wait-and-see mode" will be sustainable when the economy begins to feel the real effects of cooling the business cycle.

What this means for you

For the average borrower, the RPP's decision means a breather from rising installments, however, geopolitical uncertainty (the USA-Iran conflict) makes it difficult to talk about further cuts for now. Those with loans gain, while those who were counting on faster drops in debt servicing costs or an improvement in the zloty's exchange rate lose.

Questions and answers

Will my loan installments increase after the RPP decision from July 2026?

No, keeping rates at an unchanged level means that the costs of servicing loans based on WIBOR will remain stable.

Why didn't the RPP lower rates, despite market expectations?

The main reason is the escalation of tensions in Iran, which generates risk for the stability of the zloty and energy prices.

When can we expect further changes in interest rates?

Analysts point to the need to observe the geopolitical situation, which determines the Council's further decisions in the second half of 2026.

Sources

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