Currency conversion of the loan in CHF – how it will work
A few weeks before the parliamentary elections, deputies and senators took a closer look at the problem of people in debt in the Swiss franc. The bill enabling the conversion of loans on preferential terms was submitted by the Civic Platform parliamentary club.
Although the bill unexpectedly adopted by the Sejm differed significantly from the bill, especially in terms of the distribution of costs of this operation, the Senate, with its amendments, restored the bill to its original provisions. The final shape and whether the bill will come into force will now be decided by the deputies. Increasingly, however, we hear voices that indicate that the rules will go to the trash.
Who can benefit?
The loan may be converted in accordance with the provisions of the Act by persons who have an apartment up to 100 m2 or a house up to 150 m2. In addition, you will not be able to own any other residential property. It is worth noting that this will be an option available only to people whose loans are not higher than 80 percent of the property value.
The Senate restored the distribution during the conversion process. First of all, persons whose loans exceed 120 percent of the property value will be able to take advantage of the Act, one year after the borrower’s provisions with loans exceeding 100 percent, and only after two years other authorized persons.
How will the conversion take place?
The Act provides for the conversion of Swiss franc loans at the NBP sale rate on the day preceding the submission of the application for conversion. This way the current debt amount will be determined, expressed in PLN. At the same time, the bank will be required to calculate the hypothetical debt balance if, at the same time, the borrower opted for a PLN loan.
The new debt amount determined in this way will constitute a new mortgage loan secured on the existing property. The new loan repayment period will be the same as the remaining foreign currency loan repayment period. Also the PLN loan margin will be the same as for the liabilities repaid to date.
The condition for currency conversion will, however, be the borrower’s settlement of the difference in loan balances and principal and interest installments paid. At the same time, part of this amount will be written off. The bank will calculate if today the Swiss franc debt is higher than the zloty loan debt and some of this difference will be written off.
The unreleased loan amount
(10% or 50% depending on further legislative changes) will have to be repaid by the borrower. On the side of the person paying the loan, he will also be obliged to cover the difference in the amounts of principal and interest installments paid. In most cases, despite recent increases in the CHF / PLN exchange rate, foreign currency borrowers paid less than those in debt in PLN. The conversion procedure will calculate the amount that the borrower would pay by choosing the zloty and all the installments paid will be added together. This difference will constitute the borrower’s commitment.
The amount constituting the settlement of the difference in balances (including redemption) and the difference in installments paid will be able to be credited with a preferential loan. Its interest rate will not be able to exceed the NBP reference rate, i.e. at present 1.5%.