Hi Nigel

Thanks for these posts- they give insight into the complexity of the currency markets.

I have a Swiss Franc mortgage already from July 07 on a Polish unit and have benefited from the strengthening Zloty. Now I am looking for mortgages on 2 more Polish units in the coming months; given the current strength of the Zloty does the argument for the Swiss Franc mortgage still hold up? I appreciate the interest rate is the major factor, I am just wondering if the long term view of the Zloty has changed or if the political position with Russia might weaken the Zloty further.

Indeed how concerned should we be with the recent political developments for the Polish and other CEE property markets?

Again I appreciate the long term view should not consider the exchange markets as a primary factor; I just thought I would open the discussion to you and other experts on the forum.

All thoughts welcome.

Regards
Alan

Hi Alan,

I don't know which way the Zloty is going to head against the Swiss Franc but I too am a bit concerned about the recent rise of the CHF v the PLN.

With minimal capital growth in Poland at present there is a risk that the CHF rises considerably against the PLN thus raising your mortgage and eating into any equity.

Not sure if this is correct? Any possibe hedge against this?

Hello Alan,

Thank you for your post. I think this is a tricky question. Please see this useful link about Polish news below showing when they will enter the EURO:
http: / /www .france24 .com /en /20080910 -donald -tusk -adopt -eurozone -currency -poland -euro

With strong growth and low inflation PLN 'should' remain strong but there is that outside factor that the volatility in the economic/political markets can have a weakening effect as it has had in the last week.
If you keep your mortgage in CHF it would remain floating depending on the movement of currencies.

Now that Poland will adopt the EUR soon it means that if you get a PLN mortgage there could come a time when the rate becomes 'fixed' between PLN and EUR (as the banks did in Cypus fixing the exchange rate between CYP into EUR)so you could be paying a fixed price in the future by getting a PLN mortgage (this may or may not be beneficial).

If I was you I would speak to your mortgage advisors you are with. They will have analysists and different options hopefully available to look at. Please come and speak to me to try and help with the currency query but we are in a very volatile time and it is worth considering options with a long term view.

Nigel