“According to the Fincentrum Hypoindex indicator, the average mortgage interest rate has been falling for ten months in a row. In January, the average rate fell by two basis points, as in December, and ended at 1.94 percent, ”added Jiří Sýkora, mortgage specialist at Fincentrum & Swiss Life Select.
According to Sýkora, the decline in the average rate is surprising, because the price of resources is rising, as is the riskiness of loans. So far, rates have been kept low, mainly by banks’ competition.
The strongest January store in history
In January, banks arranged a total of 8,380 mortgages for a total of 24.942 billion crowns.
Compared to December, it was 1,571 mortgages and a total of 4.5 billion less, but even so, January became the strongest first month of the year in history, when the volume of agreed mortgages increased by more than eight billion year-on-year.
The high volume of the mortgage loan, which is already almost three million crowns, namely CZK 2,976,346, also contributed to the high volume.
Record January for online mortgages
Interest in online mortgages broke records in January.
“From October to December, we thought we were hitting the ceiling of what is possible in online mortgage demand. However, the beginning of the new year exceeded all our expectations, when January became a record month in our two-year history, “said Marek Kříž from Zaloto.cz, which brokered mortgages worth more than 6.2 billion crowns in the first month of this year. In January 2020, it was only 2.7 billion crowns.
Flats contributed the most to this growth, as their mortgage financing increased from CZK 1.1 billion to CZK 3.2 billion year-on-year, according to Zaloto.cz data. The volume of loans for family houses increased from 1.5 billion crowns to 2.5 billion crowns.
Rates are probably already at the bottom
Last year, the Czechs took out mortgages for a record 254 billion crowns. According to experts, this year will not exceed last year, which was helped, for example, by the abolition of the real estate acquisition tax, the easing of credit indicators by the Czech National Bank, and low interest rates.
Mortgage rates are likely to go up this year. “And higher rates combined with high real estate prices will worsen the availability of one’s own housing,” said Sýkora. He added that the situation in the economy could calm down thanks to vaccination against covid, and people would no longer be looking for such a safe haven for their money, such as real estate investments in particular.
According to analysts, uncertainty about the future development of the economy will drive up rates this year, along with the growing riskiness of those interested in a housing loan. Banks have also begun to estimate the prices of financed real estate more carefully. “Mortgage rates will increase slightly this year, mainly due to the higher riskiness of loan applicants. In the first half of the year, rates will range from two to three percent, “says Veronika Hegrová from the hyponamiru.cz server.
Loan or rent
People often decide whether it pays to live in a lease or to buy a property on a mortgage. It always depends mainly on the location where the person wants to live, but also on the money saved and other real estate. “The mortgage is now paying off especially in regions where real estate prices are not as exposed as in Prague,” said Kryštof Kubajko from the real estate portal Videobydleni.cz.
According to him, it is now worth living in rented houses in the capital. “Rental prices in Prague did not increase year-on-year and rather corrected by five percent, mainly due to the cessation of short-term leases through Airbnb,” he added.