Mortgages froze. The Czechs borrowed 60 percent less than a year ago

In April, banks and building societies provided mortgage loans worth CZK 17.5 billion, which is a decrease of 40 percent compared to March. The year-on-year decline exceeded 60 percent. The interest rate on mortgages actually rose in April from 4.15 percent in March to 4.4 percent in April. This follows from the statistics of the Czech Banking Association (CBA) Hypomonitor. All banks and building societies providing mortgages on the Czech market supply data to it.

The new stricter rules of the Czech National Bank for their provision probably caused a significant drop in new mortgages in April. At the same time, their expected validity led to some pre-supply in previous months.

As expected, mortgage rates are rising and this trend will remain in the coming months due to further growth in market interest rates. For the whole of this year, the volume and number of provided mortgages is approximately 40 percent lower year-on-year.

“Although the interest in one’s own housing in the company is not declining, the number of people who are willing and able to invest in housing in the current conditions is rapidly decreasing. For ČSOB Stavební spořitelna, we see a continuing decline in the volume of concluded building savings loans in the current results. Due to the uncertain development on the market, we expect that the decline in volumes may continue in the coming months, “said Jiří Feix, Chairman of the Board of Directors of Hypoteční banka and ČSOB Stavební spořitelna.

The volume of actually newly provided mortgages, without refinancing, fell by more than CZK 11 billion to CZK 14.2 billion in April. This is the lowest volume in about three years. For refinanced loans (internally or from another institution) from CZK 4.9 billion to CZK 3.3 billion.

The number of new mortgages fell below 4,500, while the average monthly number of mortgages exceeded 7,000 in the first quarter of this year and 9,500 last year.

Rates have been rising for a year in a row, with the average mortgage rate reaching its highest level since the first half of 2011 in April.

Mortgage offer prices now most often range in a relatively wide range from 5.0 to 6.5 percent, depending on the specific parameters of the mortgage, and given the development of market interest rates, they are likely to grow slightly, according to the association.