Interest rates at 5.75 percent: How did the 2024 decision change loans?

In November 2024, the MPC maintained the NBP interest rates at 5.75 percent, which froze debt servicing costs at a high level, stabilizing the credit market before the start of a later cycle of cuts. This decision directly affected the wallets of Poles, keeping the monthly mortgage installment for a loan of 400,000 PLN at a level about 300 PLN higher than the most optimistic analyst forecasts had predicted. The Council prioritized the fight against inflationary pressure over providing quick relief to household budgets, which set a hard financial framework for the banking sector for the following months.

Cost mechanics: The price of the 2024 decision

Maintaining interest rates at 5.75 percent was a clear message to the financial sector: the central bank does not intend to loosen monetary policy in the face of macroeconomic uncertainty. Borrowers with variable-rate obligations, which in most cases are based on the WIBOR index, felt the effects of this decision immediately. For a mortgage loan of 400,000 PLN, taken out for 25 years with a bank margin of 2 percent, the total interest rate was 7.75 percent.

If the Monetary Policy Council had decided at that time to cut rates by 100 basis points, the loan installment would have fallen by about 280–320 PLN per month. Maintaining rates at 5.75 percent meant an annual burden of 3,600 PLN in additional interest costs. Banks gained predictability for their margins, while households had to revise their consumption plans. This decision acted as an anchor that protected the system from instability, but at the same time, it shackled borrowers to expensive financing for much longer than originally assumed in forecasts from mid-2024.

The year 2025: A marathon of expectations instead of a sprint

The process of interest rate cuts, which began in 2025, did not resemble a dynamic braking, but rather a slow engine shutdown. Loan holders who were counting on a quick return to installments from before the hike cycle had to confront a harsh reality. Every downward move by the Council was preceded by months of inflation risk analysis. Financial media, including Business Insider Polska, published signals in November 2025 indicating that the path to an optimal interest rate level would not be simple.

Economists cited by Forbes magazine in November 2025 clearly communicated that the economy would reach a state of equilibrium allowing for rates to be maintained at a level corresponding to natural growth needs only at the end of 2026. This position was a bucket of cold water for everyone who believed in a rapid relief of household budgets after the end of 2024. The easing process was limited by the persistence of core inflation and the need to maintain real positive interest rates, which was intended to prevent capital flight from the Polish currency. Borrowers became observers of a process in which every MPC decision was subject to almost pharmaceutical analysis.

July 2026: Geopolitics as a brake on monetary policy

The turn of June and July 2026 brought a twist that was not accounted for in models created two years earlier. The escalation of tensions between the USA and Iran became the main point of reference for decisions made by the Monetary Policy Council. As indicated by analyses published in Parkiet in July 2026, the situation in the Middle East forced policymakers to change their strategy. Instead of continuing the cycle of cuts, the MPC halted its actions, reacting to global uncertainty.

The zloty, under pressure in the face of conflicts, became an instrument whose exchange rate had to be protected. In July 2026, monetary policy ceased to be a purely internal matter. It became an element of the global game for financial security. Every fluctuation in the exchange rate, being a direct result of reports on the intensification of the conflict, hit the foundations of the decisions to cut rates. The Council could not allow for sharp cuts that would weaken the zloty at a time when global markets were reacting to the risk of an escalation in military operations.

Media such as wGospodarce or INNPoland.pl emphasized the direct link between oil prices, tensions in Iran, and the level of loan installments in Poland. Borrowers, counting on summer rate cuts in 2026, had to confront their expectations with the reality of a global conflict. This situation showed the fragility of the stability upon which forecasts were built in 2025. Instead of the expected easing, the market received a signal to maintain the status quo, which for many households meant the necessity of continuing to manage their budgets under conditions of increased debt servicing costs.

PIE: A lesson on external risk

The Polish Economic Institute (PIE), publishing its conclusions in July 2026, shed new light on the decision-making process of the MPC. Experts from the institute indicated that the future of interest rates in Poland had ceased to be determined solely by domestic inflation readings or GDP growth indicators. The key risk factor became the escalation of the conflict in the Middle East. This approach by PIE was a signal to the market that old forecasting models, based solely on internal data, had lost their relevance.

It is worth comparing this with the situation in November 2024, when the MPC maintained rates at 5.75 percent. At that time, the decision was the result of fighting domestic inflation. In 2026, this fight moved to the exchange rate and currency level, where the stake was the stability of the zloty in the face of a supply shock in commodity markets. If tensions between the USA and Iran were to persist or escalate, forecasts for a return to optimal money costs would have to be re-verified. For borrowers, this meant that the final exit from the system of high installments had become a much more unpredictable process.

PIE analyses confirmed the fears of analysts: the national economy had become dependent on events in international markets. Every subsequent decision of the MPC, according to predictions by the portal samorządowy in July 2026, became a resultant of two forces: the internal need to support growth and the external necessity of protecting the currency from the effects of armed conflicts. This double pressure caused the time horizon for cheap loans to begin to shift further into the future.

Credit market dynamics: From stabilization to uncertainty

Analyzing the path from November 2024, it is clear how the perception of risk by banks and clients has changed. In 2024, the decision to maintain rates at 5.75 percent was taken as an expression of caution. The financial market, although dissatisfied with high costs, appreciated the clarity of the signal: there would be no sudden moves. This predictability allowed banks to better manage their mortgage portfolios, and borrowers to arrange their budgets based on fixed, albeit high, costs.

The situation in 2026 introduced a variable that could not be calculated in Excel spreadsheets. Geopolitical tensions in July 2026 meant that predictability gave way to reactivity. Every meeting of the Council became an event with a high degree of emotion, where the market was no longer just looking for information about inflation, but was reading news agency dispatches from the Middle East. This was the moment when monetary policy became an element of the global game for regional security. Borrowers who in 2024 were counting on a quick cycle of declines had to accept in 2026 that their fates were closely tied to events over which neither the NBP nor the Polish government had any influence.

Long-term pressure exerted an influence on consumer behavior. Poles, taught by high installments from the 2024–2026 period, began to look for safeguards, such as fixed-rate loans, which was a direct reaction to the lesson taught to them by the MPC's decisions. While in 2024 the stabilization of rates at 5.75 percent was a shock to many, by 2026 it had become a reference point from which it was difficult to move toward lower costs.

Forecasts for the end of 2026 and their verification

Forecasting the level of interest rates in 2026, based on data from April of that year prepared by Direct Money, assumed that the adjustment process would proceed according to market logic. However, the reality of July 2026 verified these assumptions. Reaching the optimal level of rates, which was mentioned in Forbes forecasts from November 2025, became a much more difficult task in the face of external shocks.

Analysts point out that for the average borrower, the key conclusion from the last two years is the necessity of having a financial buffer. The 2024–2026 period showed that monetary policy is not linear. Even if the path of cuts is outlined in models, exogenous factors, such as the escalation in Iran, can stop the entire process in an instant. For people with mortgage loans, this means that the return to the times before the period of high rates is a long-term process, not a short-term correction.

Managing capital in such conditions requires flexibility from borrowers. The market stopped believing in quick and deep cuts because inflation and external risks effectively block the room for maneuver for the MPC. The stabilization that was talked about in 2024 became the foundation upon which hope for lower installments was built, but the road to them turned out to be bumpy. Every subsequent meeting of the Council is now carefully monitored for risks, not just data on the prices of goods and services in the country.

What does this mean for you?

For the average borrower, this situation has one fundamental meaning. The expectations for a quick drop in loan installments that accompanied the decision in November 2024 turned out to be too optimistic. The stabilization of rates at 5.75 percent was merely a prelude to a long game for maintaining macroeconomic balance. In 2026, in the face of geopolitical uncertainty, borrowers must prepare for the fact that the cost of money will react to global tensions much faster than to domestic economic data.

Savers gained from this, as they could benefit for a long period from relatively high interest rates on deposits and savings accounts, which was the other side of the coin of high rates. However, for those in debt, every month of maintaining rates at a high level constituted a real burden. To minimize financial risk in such an unpredictable environment, the most effective advice is to overpay the loan principal in periods when you have financial surpluses – every zloty paid above the required installment permanently lowers the base on which interest is calculated, which is the only sure way to protect the budget from interest rate volatility. Geopolitics, which dominated the central bank's agenda in 2026, is a factor that will remain with us for longer, which means that the return to cheap credit may take much longer than was assumed just a few months ago.

Questions and answers

Why didn't interest rates in Poland fall faster?

The main brakes were external factors, including the escalation of the conflict in the Middle East in 2026 and the need to stabilize the zloty exchange rate, which remained under constant pressure in the face of tensions between the USA and Iran.

When is the optimal interest rate level expected to be reached?

According to forecasts from November 2025, reaching the optimal level of interest rates is expected no earlier than the end of 2026, assuming the extinguishing of geopolitical risks.

How does the situation in Iran affect my loan installment?

Geopolitical tensions exert pressure on the weakening of the zloty, which forces the MPC to maintain higher interest rates to counteract imported inflation, which directly translates into higher costs of loans based on WIBOR.

Did the decision in November 2024 have long-term effects?

Yes, this decision froze debt servicing costs at a high level, which stabilized the credit market, but at the same time set a very high starting threshold for the later, slow process of interest rate cuts.

What is the main risk for borrowers in the second half of 2026?

The main risk remains the lack of predictability in monetary policy, resulting from dependence on external factors, such as the development of armed conflicts and their impact on global commodity prices, which directly determines the MPC's decisions to halt cuts.

Summary of the market state

An analysis of the actions of the Monetary Policy Council over the years 2024–2026 shows a clear evolution in the approach to capital management. From an initial, fairly predictable model of fighting inflation, the market has moved into a phase of a complex game with global factors. For the borrower, this is a lesson in humility toward mechanisms over which they have no direct influence. The stability that was introduced in 2024 was necessary for the survival of the financial system, but its price was shifted entirely onto consumers.

Currently, in the third quarter of 2026, the credit market is at a turning point. If tensions in the Middle East region fade, one can expect an acceleration in the pace of rate cuts, in accordance with forecasts from a year ago. However, if the escalation continues, borrowers must come to terms with the thought that high installments will remain with them for the coming months. The decision from November 2024 will remain the most important reference point that defined the standard of loan costs for a long time. It was that moment, in which 5.75 percent became the new reality, that decided how difficult and uncertain the road to returning to lower debt servicing costs in Poland became. Anyone planning their finances in 2026 must look not only at inflation charts but also at the map of world conflicts, as these are what most influence the decisions made at the NBP headquarters on Świętokrzyska Street.

Managing debt in current conditions requires us to completely move away from the belief in a quick return to cheap money. The credit market, after years of low rates, has gone through an adaptive phase in which high costs have become the new operational standard for banks. Borrowers who did not secure their positions in 2024 are currently bearing the full risk of market volatility, which was impossible to fully predict based on domestic economic indicators. It is worth monitoring the announcements after each meeting of the Council, but with the caveat that the final direction of monetary policy in Poland is no longer decided only on Świętokrzyska Street, but also in the political offices of world powers.

For people who still have variable-rate loans, it is crucial to understand that the stability of the zloty is a priority for the MPC. Every signal of currency weakening, fueled by oil prices or tensions in Iran, automatically limits the space for interest rate cuts. This is a mechanism that will work as long as the global economy remains in a state of heightened combat readiness. From an editorial perspective, this situation shows how much the Polish consumer has become dependent on global commodity flows. There is no return to the simple models of the last decade, where inflation was the only determinant of rates. Now we must learn to function in conditions of permanent uncertainty, where economic forecasts have an expiration date no longer than the next reports from press agencies from the fronts of the conflict in the Middle East. This is a new era of lending in Poland, in which knowledge of the outside world is just as important as knowledge of one's own household budget. Every borrower should currently adopt a defensive stance, assuming that the scenario of maintaining interest rates at an elevated level is much more likely than a quick transition to a cycle of aggressive cuts. Such an approach allows for building financial resilience, which in the face of the coming quarters may prove to be more important than any promises from market analysts.

Sources

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