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Senate opts for lower Swiss-franc mortgage conversion rate

PR dla Zagranicy
Jo Harper 04.09.2015 11:57
The upper house of parliament, Senate, on Friday voted to amend a bill on conversion of Swiss franc-denominated mortgages into złotys so that costs are covered 50:50 by banks and mortgage holders.
Photo: Sxc.huPhoto: Sxc.hu

The Senate overturns a Sejm proposal that the costs would be 90:10 covered by banks and mortgage holders, respectively.

The bill now goes back to the lower house, Sejm, for further discussion and voting.

The draft law assumes that banks will pay half of the cost of the currency conversion or around PLN 10 billion (USD 2.64 billion).

To the array of voices against the 90:10 version of the bill was added National Bank of Poland (NBP) chief Marek Belka this week, who said the conversion of Swiss franc-denominated mortgages into złotys threatened the stability of the banking system.

The bill on the conversion of mortgages denominated in Swiss francs into the Polish złotys is one of the main topics of a three-day sitting of the Senate, which began on Wednesday.

The issue of compensation was triggered by the dramatic appreciation in the value of the Swiss franc since January when the Swiss central bank lifted exchange rate controls on the domestic currency, impacting on the estimated 500,000 mortgage holders in Poland, as well as in other countries of the CEE region.

The Senate also voted on Friday to adopt an amendment tabled by the head of the Budgetary and Finance Committee, Kazimierz Klein (Civic platform, PO), that the conversion of Swiss franc denominated-mortgages into zlotys should be spread over time depending on the loan to value of homes (LtV) ratio. If the LTV is higher than 120 percent (where the mortgage is 120 percent of the value of the home), an application for compensation can be filed immediately. If the LTV is 100 percent the application can be filed no earlier than one year after the bill comes into effect. If the LTV is 80 per cent the application can be filed no earlier than two years after the bill becomes law.

The entire bill with amendments was backed by 51 senators, 31 against and six abstentions. (jh)

Source: PAP

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