Polish Homeowners Lose Heavy On Swiss Franc
Classified Polnews
Warsaw, Poland 8 August, 2011 - The nearly seven hundred thousand Polish homeowners who took mortgage loans in Swiss Francs when it was at its long standing exchange rate of about 2 zloty per franc now have to pay back the loans at about 3.7 zloty per franc.
Under Water?
The combination of low interest rates on mortgage loans in Swiss Francs as compared to Polish Zloty and the long term stability of the Swiss Franc lured people into making commitments to repay loans in a currency different than the one in which they earn their money.
Even with the Swiss Government taking emergency action to stabilize its currency to protect the country's exporters, some feel that at this time the Swiss Franc will continue to strengthen against the Polish Zloty.
That leaves some in a quandary. Do they refinance now and take a new loan in Polish Zloty? Or do they wait for the exchange rate to drop?
Refinancing now locks people into owing much more than they originally expected. And it wipes out equity that might have been built up over time.
But with nothing to guarantee that the exchange rate will drop, or not continue up, waiting to refinance may be more costly.
So as it stands, some homeowners watch the the exchange rates almost continually and worry whether they will be able to make the next mortgage payment.
For them, the financial crisis has truly hit home.
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