Interest rates in Poland: will loan installments fall in 2026?

The Monetary Policy Council maintained rates at 5.75 percent as early as November 2024, and experts predict reaching an optimal rate level no sooner than the end of 2026. For millions of Poles paying off mortgage loans, this means an extended period of high debt servicing costs that will not decrease in the coming months. The financial market, observing the uncertain international situation, has already priced this scenario as the baseline for the Polish economy.

A financial lesson for the wallet: an example of a 300,000 PLN loan

Let's look at the specifics that often get lost in the noise of media forecasts. A borrower with a remaining principal of 300,000 PLN, assuming a bank margin of 2 percent and a 3M WIBOR rate based on interest rates of 5.75 percent, is burdened with an interest rate of 7.75 percent. In such a financial model, the principal-interest installment for a loan taken out for 25 years is approximately 2,270 PLN. Maintaining interest rates at this level for subsequent quarters rules out any reduction in monthly expenses.

If the Monetary Policy Council were to decide on a cycle of cuts that would bring a reduction of 1 percentage point – bringing the interest rate down to 6.75 percent – the borrower's installment would fall to approximately 2,080 PLN. The difference is nearly 190 PLN per month. On an annual scale, that is over 2,200 PLN remaining in the household budget. The lack of a cut in 2026, mentioned in forecasts, means the holder of such a loan must maintain the current high level of spending. This is not just bank statistics, but a tangible amount that could be allocated to current consumption or savings, which in current conditions entirely feeds bank margins and the cost of capital.

Borrowers must understand that in the current business cycle, the central bank is not guided by immediate relief for households, but by macroeconomic stability. Since the 5.75 percent rate has remained the foundation since November 2024, long-term expenditure planning should be based on the assumption that loan costs will remain rigid at least until December 2026. Every month of delay in decisions to loosen monetary policy is a real opportunity cost for the indebted Pole.

The geopolitical trap: why can't the MPC cut rates?

Monetary policy does not function in a vacuum, and recent data from July 2026 clearly point to the cause of the impasse. Tensions between the USA and Iran, widely reported by media such as Parkiet and innpoland.pl, have become the main point of reference for members of the Monetary Policy Council. The escalation of the conflict in the Middle East exerts direct pressure on energy commodity prices, which consequently hits the exchange rate of the zloty.

For the central bank, a weak currency is a direct path to increased imported inflation. If the zloty loses value, the costs of purchasing energy and raw materials in foreign currencies rise, which automatically boosts the CPI. In such conditions, an interest rate cut would be perceived by the market as a signal to sell off the Polish currency, which would only deepen the problem. Analysts at the Polish Economic Institute (PIE) in their July 2026 analyses emphasize that as long as the situation in the Middle East remains unstable, the MPC does not have a sufficient safety margin to loosen monetary policy.

Borrowers have therefore become hostages to global processes over which they have no influence. The November 2024 decision to keep rates at 5.75 percent was not accidental – it was a defensive strategy. Today, after nearly two years, we see that this caution was justified, although for the average Pole, it is cold comfort. The currency market is currently extremely sensitive to any reports of troop movements or the hardening of diplomatic rhetoric, which means that every statement from Washington or Tehran is analyzed in Warsaw through the prism of future interest rate decisions.

Forecasts for 2026: a long march to the optimal level

An analysis published in Forbes on November 6, 2025, indicates that the cycle of cuts the market is waiting for is inevitable, but its pace will be disappointingly slow. Experts unequivocally define the end of 2026 as the earliest date at which interest rates could reach a level considered optimal for the current state of the economy. What does this mean in practice? Above all, it means that no sudden moves should be expected before the end of 2026.

Forecasts prepared by Direct Money analysts in April 2026 confirm this scenario. They point to a long-term adjustment process. The economy must first deal with inflationary pressure and then with stabilizing the zloty's exchange rate before the central bank decides on bold cuts. This "small steps" approach is painful for the real estate sector, but from the perspective of NBP strategy, it is the only way to avoid an inflationary shock.

It is worth noting the structure of the MPC's decisions. Since November 2024, the Council has maintained a course that is clear to institutional investors but frustrating for retail borrowers. A lack of changes in interest rates for such a long period is a rarity in Polish monetary policy. This testifies to the scale of the challenges the country is facing. The zloty, although strong in its fundamentals, is under constant geopolitical pressure, which forces policymakers to maintain high rates to protect the purchasing power of money.

The role of the zloty in the National Bank of Poland's strategy

The stability of the zloty became the main determinant of monetary policy in 2026. As economists note in wGospodarce publications, any attempt to lower the cost of money in conditions of high volatility in commodity markets could lead to an uncontrolled outflow of foreign capital. Investors looking for safe havens withdraw from emerging markets as soon as the risk of armed conflict appears on the horizon.

Poland, as a country with high economic openness, is particularly exposed to these fluctuations. Keeping rates at 5.75 percent is a kind of "insurance" for our currency. It provides investors with a risk premium, which allows the zloty exchange rate to be maintained at a level that does not stifle imports, but also does not fuel inflation. For borrowers, however, this means maintaining high installments, because WIBOR – the indicator on which the interest rate of most mortgages depends – is directly correlated with the level of NBP rates.

It is worth noting that this dependency is rigid. Commercial banks show no willingness to lower margins in the face of market uncertainty, which means the total cost of credit remains at a level close to the peak values of the 2024 period. The lack of competitive pressure in the banking sector, combined with the restrictive policy of the NBP, creates a "frozen" situation for thousands of Poles.

What do MPC decisions mean for the average citizen?

For the average borrower who was counting on quick installment drops in 2024, the current situation is a signal to change their financial strategy. Instead of waiting for the Monetary Policy Council's decisions, one should focus on managing the household budget based on current, high costs. This phenomenon, often referred to as the "new normal," forces a revision of investment and consumption plans.

Key dates, such as the November 2024 MPC meeting or subsequent analyses published in 2026, show a clear trend of waiting. The Council does not want to take risks that could harm the country's financial stability. From the borrower's point of view, this is the worst possible scenario, because no changes mean no relief. However, it is worth looking at it from the other side: no changes also mean no sudden jumps in installments, which in conditions of geopolitical uncertainty provides at least predictability of costs.

There is no room for sentiment here. NBP decisions are a cold calculation of inflation and exchange rate risk. If a borrower does not have financial reserves that would allow them to survive this period, the situation becomes critical. However, from a macroeconomic perspective, keeping rates at 5.75 percent is the only tool that keeps inflation in check.

Table: Evolution of monetary policy in 2024–2026

The history of the Monetary Policy Council's decisions over the last two years is a record of caution, which for borrowers meant one thing: long-term stagnation of debt servicing costs. Instead of quick cuts, we received a waiting scenario. The MPC anchored rates at 5.75 percent as early as November 2024 and has consistently stuck to this line since then, despite external pressure. The market had to come to terms with the fact that the expected drop in installments would not come as quickly as the wallets of Poles would like.

Here is a summary of the events that defined the course of monetary policy:

06.11.2024: Maintaining rates at 5.75 percent (TVN24)
06.11.2025: Forbes analysis on the end of 2026 as the earliest date for reaching the optimal level.
08.07.2026: Analysis of the impact of the conflict in Iran on MPC decisions (Parkiet, wGospodarce, innpoland.pl)

Analyzing these dates, it is clear that the central bank is consistent. Since November 2024, no move has been made that would indicate a desire to loosen policy. Every subsequent escalation of the conflict in the Middle East, which the Portal Samorządowy had already warned about in July 2026, only confirmed the Council members' conviction that haste is inadvisable. The zloty under pressure, uncertainty in commodity markets, and inflationary risk mean that even if the optimistic scenario of the end of 2026 comes true, it will be an extremely slow process.

Conclusions for the borrower: how to survive?

For mortgage holders, this means one thing: living with an installment that has been standing still for nearly two years, ignoring dreams of cheap money. Hopes for quick relief, which appeared in the media as late as 2025, have been finally verified by the realities of the global market. Those saving on deposits gain; holders of variable-rate loans lose.

The catch lies in the unpredictable geopolitical situation. If the conflict in the Middle East intensifies, the MPC may be forced to keep rates high even longer than the end of 2026. For household budgets, this is a signal not to plan major expenses based on hypothetical drops in installments. Patience, which the financial market was unable to guarantee for many months, has become the only available tool.

Experts from Forbes and currency market analysts agree: the economy is in a phase of long-term adjustment that excludes sudden downward moves. Each subsequent quarter was merely a verification of the November 2024 course. Instead of looking for hope in quick cuts, it is worth preparing for a stabilization scenario.

Questions and answers

Why is the MPC not lowering interest rates despite the time elapsed since November 2024?

The main reason is high geopolitical uncertainty, including the escalation of the conflict in the Middle East, which affects the stability of the zloty and the risk of imported inflation.

When can a real drop in loan installments be expected?

Economists' forecasts indicate that we will reach the optimal interest rate level no sooner than the end of 2026.

Does the situation in Iran have a direct impact on my loan in Poland?

Yes, tensions in this region affect the zloty exchange rate and MPC interest rate decisions, which directly translates into the amount of variable-rate loan installments.

Should any cuts be expected in 2026?

Analysts indicate that if the cycle of cuts begins, it will be a process spread out over time, and significant relief in household budgets is unlikely before 2027.

Is there any alternative for borrowers in the current situation?

For people with variable-rate loans, managing financial liquidity and potentially overpaying the principal remains key, which in high-interest-rate conditions is the most effective method of reducing debt servicing costs in the long term.

Sources

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