Relative financial benefits of Swiss Franc and Euro-denominated mortgage loans in Poland

Michal Buszko

Relative financial benefits of Swiss Franc and Euro-denominated mortgage loans in Poland

Číslo: 1/2016
Periodikum: Perspectives of Innovations, Economics and Business
DOI: 10.15208/pieb.2016.04

Klíčová slova: Foreign currency loans, fx, Swiss Franc, Euro, Polish Zloty, Úvěry v cizí měně, fx, švýcarský frank, euro, polský zlotý

Pro získání musíte mít účet v Citace PRO.

Přečíst po přihlášení

Anotace: This paper evaluates financial benefits obtained by private clients of banks in Poland resulting from Swiss franc- and euro-denominated mortgage loans against Polish zloty mortgages. As fx mortgage loans were commonly used in period 2005-2009 and quickly dominated Polish banking sector (as well as sectors in many other CEE countries), they became a fundamental element of banks’ assets and a source of risk for borrowers. The main goal of the paper is to evaluate if fx mortgage loans, are more cost-efficient, than loans taken in domestic currency (PLN). To assess the financial benefits, the author proposed mathematical model of repayment of mortgage loans taken in the period 12.2004-12.2012 based on variable interest rates and actual exchange rates. Upon the data obtained from the model, the author used eight ratios for assessments of benefits. The analysis of benefits of fx borrowers was conducted per borrower, per period (month) as well as in form of cumulated benefits for all borrowers and all months of crediting. Upon the research one may find that since 2005 most beneficial in Poland are mortgage loans denominated in euro. They are generally more cost-effective than loans denominated in Polish zloty and most popular in period 2005-2009 fx loans in Swiss franc. The investigation of relative benefits showed also that the most commonly used fx loans denominated in Swiss currency are globally more expensive for borrowers than domestic currency loans. The exception are 30-years loans taken in 2009 and 2011.