The impact of inflation on the cost of adjustable-rate mortgages

  • Tomasz Musiałowski Uniwersytet Ekonomiczny we Wrocławiu


Aim: To assess how inflation affects the cost of adjustable-rate mortgage from the perspective of personal finances.
Design / Research methods: Adjustable-Rate Mortgage simulations were carried out, showing both the nominal and real costs of a mortgage loan. The behavior and the relationship between the inflation rate and WIBOR 3M rate were compared.
Conclusions / findings: The analysis shows that the real cost of mortgage decreases with an increase in inflation. During the period under review, inflation declined, reducing both the real and nominal cost of the loan. There was a strong positive correlation between the WIBOR 3M rate and the inflation rate. Equally strong, although a negative correlation was observed between the inflation rate and the real interest rate. With the decline in inflation, real mortgage rates increased, and vice versa. Particular attention was paid to the periods in which inflation was rising. WIBOR 3M rate reacted to this increase to a much lesser extent and with a lag compared to the inflation rate.
Originality / value of the article: Considering that forecasts presented by the National Bank of Poland predict inflation growth in the coming years, a thorough examination of the inflation impact on the mortgage costs is an important issue for risk management in households with mortgage.

Author Biography

Tomasz Musiałowski, Uniwersytet Ekonomiczny we Wrocławiu
Doktorant, Katedra Ubezpieczeń


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Ustawa o Narodowym Banku Polskim z dnia 29 sierpnia 1997 r. Dz.U. 1997 nr 140 poz. 938