NBP interest rates in 2026: Will your loan installment go down?

The main NBP reference rate remains at 5.75 percent, and forecasts indicate that significant reductions in loan installments will have to wait until the end of 2026 due to the unstable geopolitical situation. During its July 2026 meeting, the Monetary Policy Council did not decide to change course, maintaining restrictive conditions for the banking sector. The lack of action from policymakers is the result of a cool analysis of external risks, which effectively paralyze the potential for loosening monetary policy in Poland.

Current status: A stagnant interest rate landscape

For many months, the main reference rate of the National Bank of Poland has been frozen at 5.75 percent. This figure has become the benchmark for all loan agreements based on the WIBOR rate. While in previous years the market expected dynamic downward movements, the current strategy of the MPC is based on waiting. The Council does not want to risk a rapid acceleration of inflation that could occur after lowering the cost of money too early.

Commercial banks in Poland have fully adjusted their offers to this level. Loan margins, which in theory could be a competitive element, remain at a stable level because financial institutions include the risk of variable economic conditions in them. Every borrower with a variable-rate obligation feels this directly in their wallet. The lack of changes in NBP communications after the July 2026 meeting confirms that the priority is exchange rate stability, not immediate relief for households.

This situation creates a specific impasse. On one hand, we have the industrial sector, which needs cheap capital to finance modernization and investments. On the other hand, the central bank must look at a broad spectrum of macroeconomic data, including inflation data and foreign trade results. Stabilizing rates at the current level is a tool intended to protect the zloty from excessive volatility. Any downward move in current conditions would be perceived by financial markets as a signal to sell off the Polish currency.

It is worth noting that banks are not sitting idly by. They are introducing protective mechanisms that mean even potential future MPC decisions on cuts do not have to automatically translate into a proportional decrease in installments. In their credit policy, banks take into account not only the NBP rate but also their own costs of acquiring capital, which remain under pressure in the current atmosphere of geopolitical uncertainty.

Causes: Why does geopolitics dictate terms to borrowers?

The reasons for keeping rates at 5.75 percent do not lie solely within Polish borders. A key factor influencing the MPC's decisions is the situation in the Middle East. The US-Iran conflict, which escalated in mid-2026, has become the main point of reference for analysts. The Polish currency reacts nervously to these reports, which forces the Council to maintain a defensive stance.

The oil market is directly linked to the situation in the Persian Gulf region. Any information about the blockade of trade routes or the intensification of military actions leads to an increase in energy commodity prices worldwide. For Poland, which is a net importer of energy, this means inflationary pressure. If oil prices rise, transport and production costs also rise, which ultimately hits the end consumer. The NBP cannot allow a strong external impulse in the form of expensive fuels to be added to internal inflation factors.

The Polish Economic Institute, in its reports from July 2026, clearly indicated that further decisions regarding interest rates will largely depend on the development of the conflict in that region. This is not an isolated opinion – similar analyses are coming from financial institutions monitoring emerging markets. The zloty, as a currency classified as an emerging market, is particularly exposed to capital outflows during times of global unrest. Foreign investors look for safe havens, which in practice means the weakening of currencies in the Central and Eastern European region.

In such a situation, the NBP must choose. It can either lower rates and risk a sharp depreciation of the zloty, which will make imported goods more expensive, or keep rates high to attract capital and protect the purchasing power of money. The Monetary Policy Council consistently chooses the latter solution. Geopolitics has ceased to be just a topic for television news – it has become a real cost that adds hundreds of zlotys to the mortgage installments of millions of Poles every month.

The lack of predictability in relations between world powers means that financial markets are no longer pricing in rapid changes in monetary policy. As late as 2025, there were hopes for a faster departure from restrictive policy, but the development of events in subsequent months verified these hopes. We are currently observing a period of stabilization in which no one wants to risk hasty decisions. Every subsequent month of keeping rates at this level is confirmation for the MPC that the security of the financial system is the priority.

Forecast: When will we realistically feel a drop in installments?

Economists' forecasts for 2026 are clear: we will have to wait until the final months of the year for significant installment reductions. Analyses published in April 2026 suggested that only at the end of this period would it be possible to reach a level that experts define as optimal for the economy. This means that the coming months will be a time of stagnation, in which loan holders should not expect significant relief.

To understand what a change in rates means for a wallet, let's perform a concrete simulation. Let's assume a mortgage loan worth 300,000 PLN, granted for 25 years, with a bank margin of 2 percent. Currently, with a reference rate of 5.75 percent, the total interest rate on the loan is 7.75 percent. In such a scenario, the monthly capital-interest installment is approximately 2,260 PLN.

If the Monetary Policy Council decided to cut rates by 0.25 percentage points, the total interest rate would fall to 7.50 percent. In that case, the monthly loan installment would be approximately 2,215 PLN. This means savings of around 45 PLN per month. On an annual scale, this is an amount of 540 PLN. For many families, this sum does not constitute a breakthrough, which shows that even individual MPC moves do not bring an immediate improvement in the borrower's financial situation. Only a series of cuts, accumulated over a longer period, could bring a noticeable change in the household budget.

Economists from the banking sector note that banks react very slowly to signals from the NBP. Even if a decision to cut is made, the change in interest rates in loan agreements usually occurs with a delay resulting from WIBOR rate update periods (most often quarterly or semi-annual). This means that the borrower will not feel the drop in the installment on the day the MPC announces the decision, but only after a few months, when the bank recalculates the repayment schedule.

In the context of forecasts for the end of 2026, it is worth remembering that the financial market is already pricing in certain scenarios in advance. If there is a lasting extinguishing of geopolitical tensions, we can count on a slow but systematic downward trend. However, if the situation in the Middle East escalates again, these forecasts will become obsolete. Uncertainty is built into the current financial system.

For the borrower, it is crucial to prepare for a conservative variant. Instead of counting on a quick drop in installments in the coming weeks, one should plan the household budget assuming that costs will remain high for the coming quarters. This allows one to avoid financial shock if the geopolitical situation forces the MPC to keep rates at the current level longer than the most optimistic scenarios assume.

It is also worth paying attention to the attitude of commercial banks. In periods when rates are high, banks enjoy higher interest income. Therefore, they do not have a strong motivation to compete on margin in a way that would drastically reduce the cost of the loan for the client. This asymmetry of information and market power means that the borrower is largely dependent on NBP policy, rather than on market mechanisms, which in theory should force lower prices under competitive conditions.

The history of MPC decisions from 2025-2026 shows that the central bank is very reluctant to make changes until it receives hard evidence of macroeconomic stabilization. Data from July 2026 indicate persistent inflationary pressure and currency uncertainty, which is a strong argument for proponents of keeping rates high. Will there be a breakthrough? According to most analysts, the chances of this in the coming weeks are close to zero.

The situation on the labor market and industry in the face of high rates

Keeping interest rates at 5.75 percent has consequences not only for mortgage holders but also for the entire business environment. Entrepreneurs, when planning investments, must take into account the high cost of debt financing. As a result, many projects that would be profitable in a low-interest-rate environment are currently being shelved.

The braking of private investment is visible in industrial production data. Companies are holding back from purchasing new machines or automating production lines because servicing investment loans absorbs a significant portion of the generated margin. This, in turn, translates into lower economic growth dynamics. The NBP faces the difficult task of balancing the fight against inflation with the need to stimulate growth through cheaper money.

The labor market, although still relatively strong, is beginning to feel the effects of the investment slowdown. In sectors sensitive to capital costs, we are observing greater caution in hiring new employees. Companies prefer to wait out the period of high costs rather than increase their fixed personnel burdens. For borrowers, this means that job stability – crucial when repaying long-term obligations – may be put to a greater test in the near future than in previous years.

It is worth noting that high interest rates act like a "tax on investment." Every zloty spent on loan interest is a zloty that was not spent on innovation, research, or employee training. This phenomenon creates a risk of structural weakening of the Polish economy in the long term. Policymakers at the NBP are aware of this, but in the hierarchy of goals, price stability remains in first place.

The conflict in the Middle East, which is talked about so much in the context of interest rates, also affects supply chains. If energy and commodity prices rise, companies must pass these costs on to customers, which again fuels inflation. This is a vicious circle from which it is very difficult to exit without improving the situation in regions key to global trade. Poland, as an open economy, is particularly sensitive to these shocks.

Summary: What to expect in the coming months?

The main NBP reference rate at 5.75 percent is the result of risk calculations that extend beyond the country's borders. In the coming months, one should not expect sudden changes. The MPC will remain faithful to a strategy of caution until the situation in the Middle East regains predictability. For a mortgage holder, this means the need to continue managing the budget while taking into account current, high installments.

Forecasts pointing to the end of 2026 as a moment of possible breakthrough are not a promise, but the result of an analysis of current trends. Any escalation of the conflict in the Persian Gulf region or a sudden jump in oil prices will be a signal for the MPC to keep rates at the current level. Loan holders should therefore follow reports on the geopolitical situation above all, as these decide the level of their monthly expenses today to a greater extent than traditional economic indicators.

The survival strategy in household budgets should be based on the assumption that current conditions are the new normal. There are no signals announcing a quick return to the days of cheap credit. It is worth focusing on optimizing other expenses, as the cost of servicing debt will remain a significant burden for a significant part of the coming year.

Questions and answers:

Will interest rates fall in the near future?

Forecasts indicate that significant interest rate cuts from the 5.75 percent level will likely have to wait until the end of 2026.

Why is the MPC not lowering rates if inflation is stable?

The main brake is geopolitical tension in the Middle East, which weakens the zloty and increases uncertainty in commodity markets, forcing the central bank to adopt a defensive policy.

How does the situation in Iran affect my loan in Poland?

The escalation of the conflict increases currency risk and pressure on the zloty, which forces the MPC to maintain higher interest rates to protect the value of the Polish currency, which in turn translates into higher costs of servicing variable-rate loans.

Sources

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