“Fincentrum Hypoindex’s average interest rate in November is slowly catching up with banks’ bid rates and is approaching the three percent mark at 2.70 percent and it is clear that it will continue to rise,” said Jiří Sýkora of Fincentrum & Swiss Life Select.
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Mortgage volumes were the fourth highest this year in November. People borrowed a total of 37.204 billion crowns for housing and arranged a total of 11,369 mortgage loans.
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“Compared to October, the volume of agreed mortgages increased by 16 percent, and then there was an increase of even 38 percent year-on-year,” added Sýkora.
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According to mortgage specialists, there is an increased interest in mortgages this year, mainly due to fears of constantly rising mortgage rates, as well as fears of stricter mortgage conditions, which will come into force in April next year.
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Over the past 11 months, the volume of agreed mortgages amounts to a total of 392.613 billion crowns. It is certain that the limit of 400 billion mortgages will be broken.
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“After two months of a slight decrease, the average mortgage amount reached a new, record value of CZK 3,272,369. And with regard to the development of real estate prices, we can expect its further gradual growth, “added Sýkora.
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Rates will continue to rise
According to the Fincentrum Hypoindex, the average mortgage rate is not rising as fast as the offer rates of banks, which in most banks have already exceeded four percent. The main reason is the clients’ mortgage contracts, which the banks started negotiating a few months ago on even more favorable terms.
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“In the near future, there will probably be no turnover on the interbank market and resources will become more expensive for banks. At the same time, it is likely that the Czech National Bank did not end up raising key interest rates. The growth of mortgage supply rates is thus far from over. However, with higher rates, interest in mortgages should cool down over time. In the next few months, however, this will probably manifest itself, also in view of the announced tightening of the rules for providing mortgages, especially in the length of the chosen fixation, which will move from seven to ten years to shorter fixations as rates rise, ”added Sýkora.
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Vojtěch Prokop from the Zaloto mortgage market also expects further growth in rates: “Average interest rates will be between 4 and 5 percent by the end of the year. In the coming weeks and months, however, we expect the CNB to raise rates further and mortgage rates to rise. Therefore, I would not recommend postponing the mortgage or refinancing for several months at this time. The current conditions may still look very acceptable in a few months. “
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