A soaring Swiss franc is a threat to Eastern European economies as households struggle to repay the now much costlier loans they took out in the currency in better times, analysts warn. Eastern Europeans rushed to take out loans in Swiss francs and other foreign currencies in 2004-2005 as interest rates were much lower than what they would have had to pay on domestic borrowings -- now that has all changed. The franc has always been a safe haven in times of trouble so those loans looked safe but as financial markets have tumbled in recent weeks, the Swiss currency has soared, driving East Europeans' repayments through the roof. "It adversely affects the economy because with rising instalments, disposable income dries up," Adam Keszeg, an analyst with Raiffeisen Bank in Budapest, warned. In Poland, about half of all housing loans are in Swiss francs -- 135 billion zloty (32.2 billion euros, $46.1 billion) -- according to the Polish Financial Supervision Authority (KNF). Keszeg put the figure in Hungary at 40 percent, or the equivalent of 8.7 trillion forints (31.8 billion euros, $45.6 billion), with the franc now worth more than 240 forints compared with 150-160 in 2005. In Croatia, franc-denominated loans make up some 16 percent of all borrowings, or 42 billion kuna (5.6 billion euros, $8 billion). "The local currency cost of servicing Swiss-franc-denominated loans has risen ... but more importantly, perhaps, the value of the principal has also risen in line with the Swiss franc," consultancy Capital Economics said. Emese Valko, a 36-year-old Hungarian public servant, has seen just that, with her outstanding loan now more than the market value of her Suzuki car. "I have been paying off my debt on the car for four years. Now I am back at square one, as if I had paid nothing at all," she said. As a result, people have less to spend on other goods, removing a key driver of economic growth in these export-oriented economies, analysts warn. "The rise in the Swiss franc could knock around 0.5 percent off of consumption in Poland and up to 1.0 percent ... in Hungary," Capital Economics predicted. "The brutal strengthening of the Swiss franc is sucking the power out of the economy," Andras Vertes of the GKI research firm told AFP. "The result -- instead of growing, consumption stagnates." Governments have responded by trying to get the banks to help out. Zagreb announced this week an agreement with banks to fix the exchange rate for five years at 5.80 kuna to the franc for Croats who took out a mortgage. Hungarian Prime Minister Viktor Orban meanwhile described defaulting debtors threatened by the loss of their homes as the "most severe challenge" facing the government. Out of a total 1.22 million mortgage holders in this country of 10 million, almost a quarter were late in paying their installments at the end of June, the vast majority being in foreign-currency denominated loans, according to the Hungarian Financial Supervisory Authority. In May, Budapest announced a mortgage relief programme, providing private borrowers with a fixed exchange rate, allowing them to transfer ownership of their apartments to the state, or relocating those with payments more than 90 days overdue to social homes the government is building. Polish banks have also offered to extend the loan period for clients struggling to pay back installments in zloty that have shot up but the problems seem unlikely to be resolved soon. "The sharp rise in the local-currency value of the Swiss franc is a real headache (and) ... it is one that is unlikely to ease for some time," Capital Economics noted.