Wroclaw Boy
13 Dec 2008 / #1
Ive been looking over exchange rate figures over the past year or so and have discovered that many clients who took out Swiss Franc (CHF) loans or mortgages must be furious at the moment.
Up until recently mortgages were easily accesible in Poland, mortgages were available in CHF, PLN, GBP or EUR. 90% of mortgages were denominated in the CHF currency as it carried with it the lowest interest rate. If youre taking a mortgage and the currency of which you borrow is different to that of your income there will always be an exchange rate gamble, if only investors had a crystal ball I think they would have thought twice.
Lets take for example a CHF loan of 250,000 taken out 4 months ago: that figure would have got you 492,500,000 PLN, at the current exchange rate its 627,000 PLN. So if you bought a house 4 months ago and sold it now you would need to have 134,500 PLN equity to break even.
Take monthly repayments on the above figures 250,000 CHF over 25 years 1,629 per month, but of course if you bought in Poland you would be paying in PLN so 4 months ago that would be 3209.13 PLN but at todays exchage rate you would be paying 4,064.000 PLN.
The above does not even take into consideration interest rate hikes which are occuring in Poland right now.
The message is... if you manage to get approval for a CHF loan in Poland right now, snap their arm off!! You'll be quids in.
Up until recently mortgages were easily accesible in Poland, mortgages were available in CHF, PLN, GBP or EUR. 90% of mortgages were denominated in the CHF currency as it carried with it the lowest interest rate. If youre taking a mortgage and the currency of which you borrow is different to that of your income there will always be an exchange rate gamble, if only investors had a crystal ball I think they would have thought twice.
Lets take for example a CHF loan of 250,000 taken out 4 months ago: that figure would have got you 492,500,000 PLN, at the current exchange rate its 627,000 PLN. So if you bought a house 4 months ago and sold it now you would need to have 134,500 PLN equity to break even.
Take monthly repayments on the above figures 250,000 CHF over 25 years 1,629 per month, but of course if you bought in Poland you would be paying in PLN so 4 months ago that would be 3209.13 PLN but at todays exchage rate you would be paying 4,064.000 PLN.
The above does not even take into consideration interest rate hikes which are occuring in Poland right now.
The message is... if you manage to get approval for a CHF loan in Poland right now, snap their arm off!! You'll be quids in.