Loan margins are rising – higher installments need to be paid
With a minimum (5%) own contribution, the average margin is 2.08%. At the beginning of the year, it was 1.65 and 1.94 percent, respectively. It can, therefore, be concluded that this year, banks have already increased loan installments by USD 20-30 (depending on their own contribution) in the case of a loan for USD 300,000. USD incurred for 25 years. The increases concern, of course, only new loans.
The trend of growing margins
Has been going on for quite a long time, since the beginning of 2012. Fortunately, there are many indications that the banks have already reached or are very close to the level they may find attractive. There is a chance that the margins will stabilize at a level similar to the current one. As long as interest rates in our country remain so low, there is no greater hope that margins will start to decline.
An important event of recent days is the strengthening of the dollars and the reduction of interest rates in the euro area. As a result, those paying back foreign currency loans can expect their installments to be lower than before.
In the case of a loan in euros, the installment, which at the beginning of May was approx. USD 1,386, may soon be approx. USD 50 lower (approx. USD 1,336). However, some economists predict that the dollars will continue to strengthen this year and the euro may cost up to USD 3.95 at the end of 2014.
As a result, the installment maybe even USD 100 lower than at the beginning of May, when the exchange rate was USD 4.20. The installment of the franc loan of 400 Swiss francs at the beginning of May was USD 1,380. Currently, it has fallen to USD 1,344.
Describing the current situation on the mortgage market
One cannot ignore a change that will come into force soon. Pursuant to Recommendation, from July 1, 2014, foreign currency loans may be granted only if the borrower obtains income in the currency of the loan.
However, this change will mainly affect loans in euros that are still provided by the bank – Good Finance,. It should be noted, however, that such loans have been granted very seldom recently. In the first quarter they accounted for only 0.51 percent. all mortgages paid. Therefore, the change will not be significant for the entire market.