In August, the average negotiated mortgage rate in the Czech Republic witnessed a slight decrease, dipping below the 5.8 percent threshold. Most frequently offered mortgage rates ranged between 6 and 7 percent, as reported by the Hypomonitor of the Czech Banking Association.

Despite a minor resurgence in the mortgage market, the total volume of mortgages granted since the beginning of the year remains the lowest it has been in the past decade, according to Jakub Seidler, the chief economist of the association. Seidler added, “Mortgage rates are decreasing very slowly.”

During August, banks and building societies extended mortgage loans totaling 14 billion Czech crowns, representing a 25 percent increase compared to the previous month. This also marks the highest monthly volume since June of the previous year.

The number of newly approved mortgages surged from 3,100 in July to nearly 3,700 in August. However, this figure remains roughly half the average from three years ago and is significantly lower than the mortgage peak in 2021 when the monthly average of new mortgages reached around 9,500.

Filip Beneš, the manager of mortgage loans at UniCredit Bank, noted a growing interest in “green mortgages” and loans covering up to 90 percent of the property value. This trend highlights an increasing ecological consciousness within property financing.

Excluding refinancing, freshly approved mortgages in August amounted to 11.5 billion Czech crowns, compared to 9.5 billion in July. The volume of refinanced loans reached 2.6 billion Czech crowns, up from 1.9 billion in the preceding month.

The Hypoindex by Swiss Life indicates a slight decline in interest rates. Recent data shows that the average mortgage rate in September dropped to 6.1 percent, signaling potentially more favorable conditions for prospective mortgage applicants in the coming months.

Article by Prague Forum