Foreign currency loans to be converted in Hungary; Poles look on

Hungary's government has been actively pursuing a policy of compensation to homebuyers. In the latest move, that is seen as a compromise for both mortgage lenders and borrowers, foreign currency mortgage loans will be converted to the hungarian forint, thus easing the burden on borrowers of continued exchange rate risk, according to the Financial Times. Polish analysts are watching developments in the price of the swiss franc and PM Ewa Kopacz has initiated an investigation into a possible strengthening of the Swiss currency and its effect on Polish mortgages. About one-third of Polish mortgages (600,000) are denominated in swiss francs, according to a recent Polish Radio article. Prior to the economic crash in 2008, many mortgage loan clients opted for lower interest rates on foreign currency denominated loans. After currency exchange rates jumped and local currencies lost value against the swiss franc, many Poles saw their mortgage payments increase considerably.