17:58 31 July 2024
Poland Tops EU in Mortgage Interest Rates
Poland currently holds the highest mortgage interest rates in the European Union. This situation poses significant challenges for prospective homeowners and the housing market at large. According to recent data, the average mortgage interest rate in Poland stands at 7.83 percent, significantly higher than the EU average of around 3 percent. Countries like Germany and France offer rates as low as 1.5-2 percent, highlighting the stark contrast.
High interest rates are a substantial burden for Polish households looking to buy homes. This makes housing less affordable and can slow down the market. The elevated rates are driven by a combination of factors including inflation and economic policies. For example, inflation in Poland has been persistently high, hovering around 10 percent y/y, prompting the central bank to maintain high interest rates to curb price increases.
The impact on the housing market has been profound, with fewer people able to afford new mortgages, leading to a potential slowdown in housing demand. Mortgage applications have dropped by over 30 percent compared to the previous year, indicating a significant cooling of the market.
