Full definition
Interest rate (nominal rate) is the annual percentage used to accrue interest on the outstanding loan principal. Two variants: fixed (unchanged for the whole period, or for a fixed block such as 5 years) and variable (typically WIBOR + margin). Interest is only one component of total cost, alongside origination fees, insurance and preparation charges, which is why headline 7.5% interest can translate to 11.8% RRSO. For loan comparison always use RRSO, not the nominal rate. From November 2022, all Polish banks must offer a fixed-rate option for mortgages over at least 5 years (KNF recommendation) to limit consumer exposure to rate risk.
Concrete numeric example
Offer A: 7.5% interest + 5% fee → RRSO 10.2%. Offer B: 9.0% interest + 0% fee → RRSO 9.3%. Despite higher interest, B is cheaper; RRSO is the decision metric, not the nominal rate.
Related terms
APR (Polish RRSO)
Statutory Polish indicator showing the total annual cost of a loan as a percentage: includes interest, fees, mandatory insurance and all other obligatory charges.
Origination fee
One-off charge for granting a loan: typically 2–8% for cash loans, 0–2.5% for mortgages. Payable upfront or rolled into principal, and part of RRSO.
WIBOR
The reference interest rate at which Polish banks lend to each other on the interbank market. The base for variable-rate mortgages in Poland.
