Poland: swiss franc loans come back to bite | beyondbrics

Poland: swiss franc loans come back to bite | beyondbrics:

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When Tomasz Sadlik took out his mortgage in 2007 to buy a Krakow office for his translation business he needed to borrow 600,000 zlotys ($193,000).

He now owes 1.1m zlotys, because he took the loan not in the Polish currency but in Swiss francs, something that was very popular before the crisis because of the lower interest rates charged on franc-denominated loans.

But Sadlik, along with about 700,000 other Poles made a terrible mistake because he didn’t properly calculate the risk of the zloty losing value against the franc, something that happened when the crisis hit and investors around the world fled to the safety of the franc, sending it soaring against other currencies."

'via Blog this'