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Uncertain situation for francophiles

17 March 2022


The year 2008 went down in history for mortgage credit borrowers.

It was a year in which as many as 68% of all mortgages taken out were franking credits.



When did it start?

Franc loans were granted in Poland since 2004, but they became most popular four years later. At that time, the exchange rate of the Swiss franc reached its record level of 2 PLN. Both these indicators contributed to the massive take-up of loans in Swiss franc.


Rising CHF exchange rate

Demand for franking loans weakened when the CHF exchange rate started to rise steadily in 2011. Already then, borrowers began to feel the effects of rising mortgage instalments. Year after year, rates increased, which was compounded by economic crises. One of these was the first waves of the coronavirus pandemic, which resulted in changes to the rates of many currencies on the forex market. The decline in sales, difficult conditions on the labour market and falling wages also made it more difficult for Poles to repay loans. Since taking out loans in francs on a massive scale, the exchange rate has fluctuated several times, at times even exceeding the borrower's initial debt.

Over the past few days, the exchange rate of the franc has risen to 4.7 PLN. The currency exchange at the moment is more expensive by almost 14% compared to September 2021. It is estimated that in March the installment of loans concluded in francs will be the highest in history.


Current situation of the franc

The currency market has not remained indifferent to Russia's attack on independent Ukraine. Previously, we wrote about sudden and record-breaking exchange rates, such as the rise of the EUR to PLN 5. Now, in the face of an unstable economic situation, francophiles have once again been hit with higher charges. After the temporary stabilisation of the CHF, the repayment of loans in francs has once again come into question. Banks fear a significant deterioration in the profitability of loans taken out to purchase real estate. Today, the franc has become twice as expensive as when the loans were granted. Borrowers, not only franking borrowers, are also feeling the effects of rising inflation, which according to the Monetary Policy Council will reach double-digit levels throughout 2022.


There is a way out for franking borrowers

When the situation of frankovichs suddenly began to deteriorate, borrowers rushed to the courts. According to data, in the third quarter of 2021 alone, there were more than 30,000 cases in the District Court in Warsaw relating to loans in a foreign currency. In order to meet these cases, the Regional Court separated the so-called franking division as the XXVIII Civil Division of the Regional Court in Warsaw. The Court of Justice of the European Union also turns out to be crucial in the case. During the session scheduled for 17th of March 2022, the Court will address, among others, the issue of prescription of claims, possibility of modification of unfair terms by national courts or partial upholding of the content of an unfair term.

Despite the dynamically changing situation on the currency market, we continue to encourage you to exchange your currencies at the AFORTI Exchange online bureau de change. Thanks to our exchange platform, you can benefit from the most attractive exchange rates, discounts and the Loyalty Programme.

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