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 0–8% of the loan amount. Payable upfront or rolled into principal.
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.