Interest rates at 5.75 percent: Is this the end of stabilization in 2026?

The Monetary Policy Council (MPC) has kept interest rates at 5.75 percent since November 2024, and experts forecast that we will approach the optimal level no sooner than the end of 2026. For a borrower with a 500,000 PLN loan taken out for 25 years, the current situation means maintaining an installment of approximately 3,570 PLN, while a one percentage point drop in rates to 4.75 percent would lower this payment by about 290 PLN per month. This difference, while noticeable for a household budget, remains for now only a mathematical model, as the Council's real actions remain in the tight grip of geopolitical uncertainty.

Long stabilization: from November 2024 to September 2026

A state of suspension in monetary policy has lasted for almost two years. Since November 2024, the Monetary Policy Council has consistently rejected market pressure to loosen the cost of money. For households and the business sector, this period has ceased to be an anomaly and has become the foundation of financial planning. Each subsequent MPC meeting ending with a statement about no changes to the reference rate confirms the market's belief that policymakers prioritize caution over stimulating the economy.

Over the last few months, the financial market has repeatedly tried to get ahead of the Council's decisions. Analyses published in economic media, including the Biznes Alert service, often suggested that a turning point was coming. However, these forecasts regularly collided with the firm stance of MPC members. The lack of reaction to signals from interbank markets shows how deeply rooted the "wait and see" strategy is. The economy, instead of benefiting from cheaper financing, must face debt servicing costs that show no downward trend.

An economist, whose opinion appeared in "Forbes" back in November 2025, made a diagnosis that remains valid today. He stated then: "We will reach the optimal level at the earliest by the end of 2026." In retrospect, these words sound like a harsh verdict for everyone who counted on faster relief in loan installments. At the time, this forecast seemed pessimistic; now, it is treated as the most likely baseline scenario.

The stabilization of the cost of money is also a result of challenges that escape the central bank's control. The situation in commodity markets, where energy prices remain under the influence of international tensions, determines the decisions to maintain a restrictive stance. The Council cannot afford premature optimism, knowing that core inflation and wage pressure still require a firm hand. For the borrower, this means an ongoing need to secure financial liquidity at current, high capital costs.

Geopolitics as a brake on change

Monetary policy in Poland does not function in a vacuum. The Polish Economic Institute (PIE), in its position from July 18, 2026, pointed out directly that all MPC moves are currently hostages to the escalation of conflicts in the Middle East. This is not just a theoretical risk factor, but a real barrier that forces policymakers to keep interest rates at an elevated level. Every price impulse in a region that is key to the supply of energy raw materials triggers a chain reaction in the Polish economy.

The risk, which is being discussed more and more loudly, concerns the stability of fuel supplies. An analysis published by XTB in July 2026 points to Iran as a flashpoint, the development of which could force the MPC to revise its strategy. In an extreme case, even rate hikes are on the table, which for most borrowers would be the worst-case scenario. Such a threat causes the discussion about cuts to be pushed to the margins.

The Monetary Policy Council, pressed by uncertainty, chooses safe stabilization. Such an attitude is criticized by some analysts who point to the stifling of private investment. However, from the central bank's point of view, the priority remains defending price stability in conditions where global energy prices could rise sharply in response to the development of hostilities. This is a defensive mechanism: the cost of money remains high to stifle potential secondary inflationary effects.

Understanding this dynamic is crucial for anyone managing a household loan budget. If the situation in the Middle East does not calm down, the chances for cuts before the end of 2026 decrease drastically. This is not a matter of a lack of will on the part of the MPC, but the result of a cold risk calculation. The economy in this model becomes resistant to cheap money, because any attempt to loosen could be countered by an external supply shock.

The situation of borrowers: what do the data say?

Let's look at the specific numbers that define today's credit reality. For a person with a mortgage of 500,000 PLN, assuming a bank margin of 1.5 percent, the current total interest rate is 7.25 percent (5.75 percent reference rate plus margin). The monthly installment with such a burden is approx. 3,570 PLN. If the MPC decided on a symbolic cut of 0.25 percentage points, the installment would fall by about 75-80 PLN. This is an amount that does not change the rules of the game, but shows the direction.

A completely different picture emerges when we consider the scenario of a 1 percentage point cut. Then the interest rate would fall to 6.25 percent, which reduces the monthly installment to a level of approx. 3,280 PLN. Savings of 290 PLN per month is over 3,400 PLN per year that stays in the borrower's pocket. Currently, however, this money is "frozen" by the Council's decisions, which, as TVN24 reports indicated, have remained unmoved by market expectations since December 2025.

It is worth recalling reports from the end of 2025, including analyses by money.pl, which precisely calculated how each rate cut translates into a real wallet. However, these calculations became a source of frustration for many. The credit market does not react to optimistic forecasts, but to hard MPC decisions, and these have been stuck in a deadlock for many months. The lack of movement means that borrowers must assume the "worst" scenario in planning their long-term expenses.

Stagnation concerns not only new loans, but primarily those already taken out. Many households that counted on a decrease in installments in the second half of 2026 had to revise their consumption plans. The lack of "breathing room" in the household budget translates into less activity in the economy. It is a vicious circle: the MPC does not cut rates because it fears inflation, and high rates limit demand, which in turn stifles economic growth.

Economists' forecasts for the end of 2026

Forecasts regarding monetary policy for the second half of 2026 are exceptionally consistent. The "Direct Money" report from April 2026 clearly indicated that analysts have abandoned expectations for sharp cuts. Instead, the conviction of long-term stagnation dominates. This consensus is based on the assumption that the Polish economy needs time to stabilize inflation indicators in the face of global risks.

A key document for understanding this process is the analysis for "Forbes" from November 2025, which outlined the 2026 horizon as a time for reaching an "optimal level." This level, although not defined to a fraction of a percent, is widely understood as a reference rate in the 4.5-5.0 percent range. However, as the last few months show, the road to this goal is bumpy.

For borrowers, this means the necessity of adapting to high debt servicing costs. The market has stopped believing in "quick opportunities." Now, a cautious approach dominates, where any excess cash is allocated to loan overpayment instead of consumption. This is rational behavior in the face of rates remaining at 5.75 percent. Experts note that even if cuts appear at the end of 2026, they will be evolutionary, not revolutionary.

It should be noted that MPC policy is also strongly correlated with the situation in labor markets. High interest rates are intended to cool the market, which can be seen in wage dynamics data. As long as wage pressure remains high, the central bank will not risk cutting rates too early. This makes borrowers, in a sense, "victims" of the fight against inflation, which has stretched out over time much more than was assumed even two years ago.

Key factors influencing MPC decisions

The Monetary Policy Council operates on several levels when making decisions. The first is consumer inflation, which, despite attempts at stabilization, still shows a tendency to bounce upward at the slightest increase in energy prices. The second is the geopolitical situation, which was mentioned in wGospodarce analyses from July 2026. The third is the global context of the monetary policy of other central banks, which also approach further loosening with great reserve.

Understanding these determinants allows one to see why 5.75 percent has become such a difficult barrier to break. In 2026, energy prices became the main flashpoint. Any unrest in the Middle East region, as indicated by the Portal Samorządowy, translates into commodity valuations on global markets. Poland, as an open economy, imports this inflation directly into the internal price system. The MPC cannot ignore this fact if it wants to maintain its mandate to fight inflation.

The current stagnation is also influenced by events over which the Polish economy has limited influence, but which ricochet and hit our interest rates. As the Portal Samorządowy (July 18, 2026) points out, further MPC steps will largely depend on the escalation of the conflict in the Middle East. The situation in Iran is also causing concern, which an XTB analysis from July 8, 2026, suggests, raising the question of the risk of necessary hikes.

The skepticism of economists is justified. The market had priced in cuts long ago, but the MPC remains deaf to these expectations. The lack of movement up or down is a state of suspension for households, in which loan installments simply stand still, despite theoretically better conditions in other areas of the economy. This imbalance between social expectations and hard macroeconomic data is the biggest challenge for the Council's communication with the market.

What's next? Prospects for upcoming meetings

Prospects for upcoming MPC meetings remain in the shadow of July 2026 analyses. Although the financial market constantly speculates about the date of the first cut, the central bank sticks to its guns. Communication coming from the NBP is conservative. Instead of optimistic scenarios, we observe more of a stalling tactic. Every MPC meeting is currently a test of whether tensions in Iran or other external factors will force a policy revision upward.

For Poles' wallets, this means that mortgages will not become cheaper in the near future. The stabilization that has lasted for the last two years is becoming an increasing burden for many households. The hope for cheap money must be postponed, because in this situation, any downward moves remain in the realm of distant forecasts. Borrowers who counted on a quick improvement must currently focus on optimizing their own finances within the framework of current, high costs.

Risk analysis indicates that the coming months will be a "stress test" period for household budgets. If inflation remains in check and the situation in the Middle East does not escalate, one can expect the first signals for cuts at the end of the year. If, however, supply shocks occur, the scenario of maintaining 5.75 percent could be extended into subsequent quarters of 2027. This makes every MPC decision closely watched not only by economists, but by millions of Polish borrowers.

It is worth asking whether the current level of rates is actually "optimal," or if it is a "safe" level for the financial system. We will probably only know the answer to this question when the Council makes the first, real decision to cut. Until then, we remain in a regime of high costs, where every loan installment is a reminder of the instability of the world in which our economy functions.

What this means for you

Maintaining rates at 5.75 percent means further high-scale burdens for borrowers, while for those saving on deposits – maintaining a relatively stable interest rate, which, however, increasingly loses out to real purchasing inflation. The catch lies in geopolitics: any escalation in the Middle East could push back the dreams of a cheaper loan, forcing the MPC to maintain a restrictive policy. For you, this primarily means the need to maintain a high financial cushion and approach new debt obligations with caution.

Questions and answers

Why are interest rates not falling despite the passage of time?

The main reason is geopolitical uncertainty, in particular the conflict in the Middle East and the risk associated with the situation in Iran, which affects energy prices and economic stability, forcing the MPC to maintain high caution.

When can a real reduction in loan installments be expected?

Experts indicate that the optimal level of rates, allowing for significant cuts, will be reached at the earliest by the end of 2026, provided that the external situation does not force the Council to maintain a restrictive course.

Is there a risk of interest rate hikes?

Market analyses, including from XTB, suggest that in the event of further destabilization in the Middle East region and rising commodity prices, the MPC may be forced to consider various scenarios, including maintaining the current course or even tightening policy to counteract inflation.

How do current 5.75 percent rates affect a 500,000 PLN loan installment?

At current rates, a 25-year loan installment is about 3,570 PLN. In the event of a 1 percentage point rate cut to 4.75 percent, this installment could fall by about 290 PLN per month, which would be a significant relief for the household budget.

Did the economists' forecasts from 2025 prove accurate?

Yes, the economists' forecasts from "Forbes" in November 2025, assuming the optimal level would be reached at the end of 2026, remain the most accurate description of the economic reality in which we have had to function so far.

Sources

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