The Average Mortgage Rate in the Czech Republic in March Reached 4.62%
March 11, 2022
15
Mortgage experts expect further rate increases in the coming months.
What happened? According to Fincentrum Hypoindex, in March 2022, the average interest rate on a mortgage loan of up to 80% of the appraised value of the property reached 4.62%. Compared to January, the increase was almost half a percent.
Context. In May last year, Czech banks offered mortgage loans at an average of 2.4%. However, the average rate has started to rise since June due to the Czech National Bank (CNB) raising the key interest rate. So, in October last year, it was 3.14%, in December — 3.81%.
Numbers. The most expensive mortgages in the amount of up to 80% of the collateral value are currently issued with a three-year fix. Banks offer customers an average rate of 4.83% per annum. Annual fixations are offered at an average rate of 4.75%, five—year fixations at 4.56%, and ten-year fixations at 4.35%.
Quote. "Based on the statements of CNB representatives and the current situation in the world, it is clear that the rate cut will not begin until the beginning of next year. Given these expectations, we now recommend choosing shorter fixations, ideally for three years. After this time, it can be assumed that the interest rate at the time of the mortgage extension may be lower than currently agreed," recommended Jiří Sýkora from Fincentrum & Swiss Life Select.
"Given the repeated intervention of CNB, which raised its key interest rate to a record 4.5% in the fight against record inflation, it is safe to say that the established growth rate of mortgage rates will not slow down," he added.
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