POLSTR in Polish Mortgages – What Is Changing?

The Polish mortgage market is going through another important change. After years of using WIBOR as the main reference rate for variable-rate mortgages, banks have just started introducing a new benchmark called POLSTR.

What does it mean for people planning to buy a property in Poland? Will mortgages become cheaper? And should you wait for POLSTR before applying for a loan?

Let's break it down.

1. What Is POLSTR?

POLSTR stands for Polish Short Term Rate. It is a new reference rate developed for the Polish financial market as part of the reform aimed at replacing WIBOR.

To understand why this change matters, we first need to explain how the two rates work.

WIBOR is a forward-looking benchmark. It reflects the conditions and expectations associated with borrowing money for a specific period, such as one or three months. Because of that, it can react to expected changes in interest rates before the Monetary Policy Council (RPP) actually makes a decision.

POLSTR works differently. It is based on actual overnight deposit transactions. In other words, it reflects the cost of short-term money based on transactions that have already taken place.

For mortgages, longer-term POLSTR-based rates can be calculated using compounded overnight rates over a specified period.

The main difference is therefore the way the rates are calculated:

• WIBOR reflects market expectations for a particular future period.
• POLSTR is based on actual short-term transactions.
• Both are influenced by monetary policy, but they may react differently to changes in the market.

2. Why Is Poland Replacing WIBOR?

The transition to POLSTR is part of a broader reform of financial benchmarks.

The objective is to introduce a reference rate based on actual market transactions and develop a consistent framework for using it in financial products.

This is not the first attempt to change the Polish benchmark system. WIRON was previously considered as a replacement for WIBOR, but the reform eventually moved towards POLSTR.

For mortgage customers, the important point is that the market is now moving towards a new benchmark, and banks are gradually adapting their products to it.

3. How Does POLSTR Affect Mortgage Interest Rates?

In Poland, the interest rate on a variable-rate mortgage generally consists of two components:

Mortgage interest rate = Reference rate + Bank margin

Let's look at a simple example.

Imagine you take a mortgage with a bank margin of 2%. If the applicable reference rate is 4%, your total interest rate will be 6%.

If the reference rate decreases to 3%, your mortgage interest rate becomes 5%, assuming the bank margin remains unchanged.

The same principle applies whether the mortgage is based on WIBOR or POLSTR.

The difference lies in how the reference rate is calculated and how changes in market conditions are reflected in it.

This is particularly important when interest rates are expected to change.

4. Will Mortgage Payments React Differently to RPP Decisions?

Yes, they may.

Let's assume that the RPP is expected to lower interest rates.

Under the WIBOR system, market expectations can be reflected in the benchmark before the actual decision. This means that WIBOR may start declining even before the RPP announces a rate cut.

POLSTR, on the other hand, is based on overnight transactions. Its value reflects changes in short-term market conditions as they occur.

When a mortgage uses a compounded POLSTR index, the rate also depends on the observations included in the relevant calculation period.

As a result, the timing of mortgage payment adjustments may differ from what borrowers are used to under WIBOR.

However, this does not mean that POLSTR will always react more slowly.

If the RPP makes an unexpected decision, short-term market rates may adjust quickly. The actual effect on a mortgage will depend on the calculation method and the interest rate reset arrangements specified in the loan agreement.

5. Does POLSTR Mean Cheaper Mortgages?

This is probably the question most customers will ask.

Unfortunately, the answer is not that simple.

A lower reference rate does not automatically mean a cheaper mortgage. The bank's margin and the other conditions of the loan are equally important.

There is also a difference between comparing the headline values of WIBOR and POLSTR and comparing the actual interest rates offered by banks.

During the transition, a spread adjustment may be used when replacing WIBOR with POLSTR. Its purpose is to account for differences between the two benchmarks.

Therefore, comparing the rates without considering the applicable adjustment can be misleading.

The best way to compare two mortgage offers is to look at the complete interest rate, the bank's margin, the repayment conditions, and the total cost of the loan.

6. Which Banks Already Offer POLSTR Mortgages?

The first major development for customers is that POLSTR is no longer just a future concept.

PKO Bank Polski and PKO Bank Hipoteczny introduced POLSTR-based mortgages for individual customers on 3 September 2026. Erste Bank is planning to do so by the end of 2026. Pekao S.A. already started offering POLSTR-based business credit products.

This is an important step towards introducing the new benchmark into the residential mortgage market.

However, it is worth remembering that not every bank participating in the reform has already launched a POLSTR mortgage.

Some institutions are still preparing their products, and their announcements about future implementation should not be confused with an offer that customers can already apply for.

7. What Happens to Existing WIBOR Mortgages?

If you already have a mortgage based on WIBOR, there is no reason to assume that your loan will immediately change to POLSTR.

The transition is being implemented gradually, and the treatment of existing agreements depends on the applicable transition arrangements and the terms of the mortgage contract.

If you already have a mortgage, we recommend checking:

• Which reference rate is specified in your agreement.
• How often your bank updates the interest rate.
• What happens if the reference rate is replaced.
• Whether your agreement includes a specific mechanism for transitioning to a new benchmark.
• The important thing is not to assume that the introduction of POLSTR automatically changes your mortgage instalment.

8. Should You Wait for POLSTR Before Taking a Mortgage?

In our opinion, the introduction of POLSTR alone is not a valid reason to postpone buying a property or applying for a mortgage.

The new benchmark will change the way variable interest rates are calculated, but it does not guarantee lower mortgage costs.

If you are planning to buy a property, we recommend focusing on the mortgage offers that are actually available to you.

Compare the total interest rate, the bank's margin, the repayment conditions, and the possibility of choosing a fixed or variable interest rate.

It is also worth remembering that a mortgage is a long-term financial commitment. The reference rate is only one part of the overall cost.

A well-chosen mortgage should fit your financial situation and your plans, rather than being based solely on expectations about future interest rate changes.

Summary

POLSTR is an important development in the Polish mortgage market. It is designed to replace WIBOR and is based on actual overnight transactions rather than forward-looking market quotations.

For mortgage customers, this means that variable interest rates may react differently to changes in the financial market and decisions made by the RPP.

The first POLSTR-based residential mortgages have already been introduced by PKO Bank Polski and PKO Bank Hipoteczny. Other banks are preparing to follow.

However, POLSTR does not automatically mean cheaper mortgages, and existing WIBOR-based agreements will not necessarily change immediately.

If you are planning to take a mortgage in Poland, the best approach is to compare the available offers and understand how the reference rate, bank margin, and repayment conditions affect your overall cost.

Feel welcome to contact us if you are considering a mortgage in Poland. We will be happy to help you understand the available options and find a solution that fits your situation.

Best regards,

Loan-brokers.pl Team

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