The period in which borrowers repaying loans with co-financing under the government program “Loan and Credit” will just be forced to face the increase in installments of housing loans. How big growth must they be prepared for?
The ‘Loan and Credit’ borrower support program officially came into force at the end of 2006, and the first loans with government support were disbursed a year later. However, in practice, the program began to attract interest only from 2009, and then the number of loans granted under RnS increased significantly compared to previous years.
Let us remind you that under the program borrowers
Can count on help for the first 8 years of the loan period. The installment surcharge is around 50%. percentage. The next months of 2017 and the following years are a time when a growing group of borrowers have to face increasing loan installments. So how much will the loan installment increase? Will it be a big difference compared to the installment with funding?
The smaller the property, the larger the installment increase
We compared three different real estate purchase transactions under a RnS loan: the purchase of a 140 sq m house and 75 sq m and 50 sq m apartments. For simplification of calculations and easier comparison, the amount of credit taken in each case is PLN 250,000.
These are loans for 30 years
With a margin of 2.00 pp taken in April 2009. People who have bought an apartment of 50 square meters must be prepared for the largest increase in the monthly installment. In this case, the end of subsidies will mean an installment higher by up to 40%. Within 8 years, these people received subsidies of almost PLN 50,000.
Borrowers who bought a flat larger than 50 square meters and a house larger than 70 square meters received lower payments. These differences result from the specific rules for calculating the surcharge. The highest level of subsidies was due for the purchase of a 50-square-meter flat and a 70-square-meter house.
Each larger area reduced the amount of the additional payment
Good Finance calculations. What if interest rates rise? Over 8 years, borrowers using RnS support received interest subsidies of around 50%, which were charged by the lending bank. Thus, the end of subsidies will not be so annoying in a situation of low interest rates when the interest is relatively low.
However, what would the situation of borrowers look like if the interest rates on loans were higher? The table below presents a simulation for loans taken out in April 2011, i.e. in these cases the payments will end only in 2 years. At the same time, an increase in interest rates was assumed – in the period from January to December 2018 Wibor will be 2.5 percent, and from January 2019 Wibor will increase to 3.5 percent.
As you can see, the installment increase is much higher. In the event of an increase in interest rates, this will translate into an increase in Wibór, then the end of interest payments after 8 years will mean an increase in monthly installments of up to 60%.