Czech money, banknotes, crown, house, mortgage, rent, building savings – illustration photo.
Prague – Banks and building societies provided mortgage loans for 7.9 billion crowns in February. Compared to January, this means an increase of 20 percent. Year-on-year, the volume of mortgages decreased by 69 percent, but this is an improvement against the 80 percent drop in January. The interest rate on truly new mortgages without refinancing fell for the second month in a row, falling to 5.9 percent from 5.93 percent in January. This follows from the statistics of the Czech Banking Association (ČBA) Hypomonitor. All banks and building societies providing mortgages on the Czech market supply data to it.
According to CBA, the month-on-month increase in mortgages was higher than would correspond to normal seasonal influences. The monthly volume of mortgages granted reached the highest level in the last six months. Nevertheless, the February result is among the weakest values in the last ten years.
The volume of actually newly granted mortgages without refinancing reached 6.5 billion crowns in February, after 5.4 billion crowns in January. The result is slightly above the average of the last six months, which is 6.2 billion crowns. The volume of refinanced loans increased to 1.33 billion crowns from 1.15 billion crowns in January.
The number of new mortgages increased by 390 compared to January to around 2,300. It was the highest since last August. However, the number of mortgages is still far below average in a long-term comparison. In the first half of last year, the average monthly number of new mortgages was around 6,000, in 2021 it reached 9,500.
The average interest rate on truly new mortgages fell for the second month in a row, reaching the level of last October. However, it is still at the highest level in the last 20 years, although in 2008 and 2009 it was also at similarly high values. At the same time, the so-called realized interest rates, in contrast to the bid prices, reflect the actual real interest rate for signed mortgage contracts. Offer rates are most often in the range between six and seven percent, their average has stagnated slightly above six percent in the last six months. fluctuating and changing direction quite often. They are on average only marginally lower this year than they were in the final months of last year, which also corresponds to the slight decline in mortgage rates. In general, however, financial markets currently expect interest rates to decline only very gradually, which indicates that even a possible drop in mortgage rates will only be very moderate in the following period,” said CBA Chief Economist Jakub Seidler.
The average amount of a mortgage rose slightly to 2.86 million crowns in February, but it still remains far below the record level of 2021, when it reached 3.46 million crowns. With stricter rules from the CNB and high interest rates increasing monthly payments, some households had to reduce their intended mortgage.