The end of low-cost housing loans is announced

The era of very cheap mortgages seems to be coming to an end, warns Milan Voldřich at Raiffeisenbank and several Czech experts. In fact, in September, average mortgage rates rose for the seventh month in a row, according to figures released by Fincentrum Hypoindex. The average interest rate is now 2.43%, compared to 2.32% the previous month. In September, Czech banks granted 9,602 mortgage loans worth ISK 30.57 billion (around EUR 1,197,415,457).

Although these figures have increased from the previous year, the number and total amount of housing loans granted has decreased compared to August. Indeed, as Jiří Sykora, an expert at Fincentrum & Swiss Life Select, explains, “In line with gradual growth, the amount and amount of loans granted decreases accordingly. However, these declining figures are a record number compared to last year. » Jiří Sýkora warns of a contraction in the mortgage market due to rising interest rates on commercial loans.

Analysts believe that this contraction in the market is mainly due to the rise in the policy rate on October 1 to 1.5% of the Czech central bank, an increase that was decided in response to rising inflation. This increase was accompanied by interest rates above the 3% target offered by the largest banks. However, the Czech central bank does not rule out the possibility of a further rise in the policy rate, on which commercial loan interest rates are calculated, before the end of the year.

In the coming months, interest rates will continue to rise; by the end of the year they could be around 3.5%, added Patron analyst Daniel Horňák. According to him, the number of customers who cannot get mortgages on the market is increasing. In fact, due to higher interest rates, repayments are also higher and, in line with rising real estate prices, it is becoming increasingly difficult to obtain loans that are requested with respect for the bank’s criteria. Czech citizen, who always banks demand from customers.