Mortgages for apartments in Poland - what currency?

Can i have your thoughts on Mortgages for flats in Poland as i will soon be taking out some , what currency you would go for & why + any thoughts on what you think may happen when the Euro comes in

Don't take it out in CHF or EUR. It's way too unpredictable - people thought that the exchange rate was stable, only to be proved wildly wrong. There's just no way of knowing what might happen - if you can't afford to see the mortgage price go up by 25-30%, then take it out in PLN.

As for the Euro, nothing will happen except interest rates going down - if the mortgage is in PLN, then it'll be converted to EUR at the fixed exchange rate on a certain day. However, Euro entry isn't likely for at least another 5 years and probably longer.

I think the local currency is most logical; what if the value of Złoty drops by 20% a year or so from now versus the currency your loan is in?

By the way, what currency do you get paid in? If it's in let's say Euro then I guess a Euro loan would be OK, otherwise stick to the known factor...

I get paid in Sterling .

I got a quote from PKO bank as they now have branch in London as well which makes things easy

Ex a £50,000 mortgage in £ = interest rate of 8.3% = monthly cost 1873 PLN

50k taken out in PLN = IR of 7.13% monthly rate = 1647 PLN

but in Euro rate was 4.68 % & 1371 PLN / month

so Euro would seem cheapest !!!!!

You thoughts please

If you're paid in sterling, the sensible thing would be to go for a sterling mortgage. if that's not available, second best would be to go for the currency of the asset you are financing, ie PLN in this case. But the rate quoted by PKO seems very high, I would shop around if I were you (Try HSBC maybe ..)

DMM - hope for the best but always plan for the worst.

You're quoting three different currencies. What if you decide for the Euro and find out two years later that the Pound has dropped 20% against the Euro? Could you handle that? What about 25%? ...30%?

If the answer is yes and you're willing take a chance - go for it.

However, for me a mortgage is too big of an investment to be to turning into a gambler. I'd chose the currency I'm getting paid in AND I'd make sure my loan has a fixed interest rate (no adjustable, "ballon", etc loans - fixed only).

Best thing to do is to get mortgage in the currency you're getting paid in. Especially in a case of a foreigner earning in Euro and buying real estate in Poland.

CHF would be even cheaper many got burnt fingers on that. If i had kept my house on that mortgage i would have lost about £40K.

My advice is watch the exchange rates, weigh up monthly payments as apposed to sell rates and speculated exchange rate fluctuations. Its borrowed in a certain currency sold in PLN (mostly) so if the exchange from PLN versus borrowed currency goes either way you can win or lose quite a bit. i.e if borrowed in Euro you pay back in Euro regardless of what the PLN is worth.

Many just want a mortgage and dont weigh up the fluctuations, most cant sell their CHF mortgaged properties at profit as they dont have enough equity to cover the poor exchange rates.

Also, something to add to that. In the past, with currency fluctuations, the interest rate of the target currency usually went down which offset the pain of the fluctuation. Interest rates can't go down any further in most western economies. That means if you get hit with a fluctuation now, you're gonna be hosed unless you're hedging against something. Interest rates have no where to go but up.

Take home loans in the currency that you earn, or hedge against currency fluctuation.