Czechs applying for fewer mortgages amid steady interest rate rise
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Loading... - Pavel Svoboda
- 16 May 2022
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The volume of newly approved mortgages fell by more than CZK 11 billion down to CZK 14.2 billion in April. This is a month-on-month decrease of around 40 percent and exceeds 60 percent when compared to the same month last year, the Czech News Agency reported on Friday.
April’s numbers are the lowest in three years when refinanced mortgages are taken out of the equation. By themselves, refinanced loans fell from March’s CZK 4.9 billion to CZK 3.3 billion.
The total number of mortgages that have been set up this year is already around 40 percent lower than it was in 2021.
Mortgage interest rates have been increasing steadily for a year now, with April’s rate reaching the highest level since the first half of 2011.
Currently, the average level of interest lies between 5 and 6.5 percent. The Czech Banking Association expects that they will continue to rise in the near future.
This trend is accelerated by the policy of the Czech National Bank which has been steadily raising its mortgage rates. Most recently from March’s 4.15 percent to April’s 4.4 percent.
ÄŒSOB building society CEO JiÅ™í Feix says that while people are still interested in owning their own home, the amount of people who are willing to invest into housing is rapidly decreasing in view of the current conditions. Read More...
