Home » Technology » The fall in rates continues. It pays to wait with the purchase of real estate, advises the analyst

The fall in rates continues. It pays to wait with the purchase of real estate, advises the analyst

The volume of provided mortgage loans reaches the limit of 21 billion crowns. According to the Fincentrum Hypoindex, the average mortgage interest rate continues to fall.

“According to the Fincentrum Hypoindex indicator, the average interest rate on mortgage loans has been falling for the third month in a row. As in May, the average mortgage rate fell by nine basis points in June to 2.21 percent. The last time it was so low was at the turn of 2017 and 2018, “said Jiří Sýkora, a specialist in the product management department of Fincentrum & Swiss Life Select.

“The fall in the average interest rate continues and has stopped at 2.21 percent in June. The trend of increasing the average amount of the loan provided, which amounted to CZK 2,748,954, also continues, ”adds Jiří.

The average amount of a mortgage loan has remained above two million crowns since November 2016 and exceeded 2.5 million crowns in November 2019. From June 2018 to June 2019, the average amount of a mortgage increased by 171 thousand crowns, but has increased in the last 12 months by more than 431 thousand crowns. The growing level of the average mortgage shows that the growth of real estate prices has accelerated significantly in the last year.

Volumes are attacking 21 billion crowns

The volume of provided mortgage loans increased in June compared to May by almost 4.5 billion crowns and approached the limit of 21 billion crowns. Banks managed to provide mortgages for more than 20 billion crowns for the last time in September and October 2018, when the volumes reached 20.805 billion crowns, respectively. 24.284 billion crowns.

“Banks in this period provided loans worth 20.95 billion crowns, for which, thanks to the record average loan amount, ‘only’ 7621 pieces were enough for them, which is 1532 mortgages less than in September 2018, when banks provided loans for 20.8 billion crowns. crown.

Successful first half

The volume of mortgages provided in the second quarter exceeded 55 billion crowns. In the first six months, banks provided mortgages for more than 109.5 billion crowns and improved by almost 26 billion crowns compared to the first half of last year. For the record first half of 2017, when banks provided mortgages worth more than 118.5 billion crowns, they are losing “only” nine billion crowns.

With the number of mortgages provided at 7,621, June was the most successful month for banks since November 2018, when they provided 8,617 mortgages. In the first half of the year, banks provided a total of 41,545 mortgages, which is 4,671 more mortgages than in the same period last year. Compared to the record year of 2017, however, 16,632 fewer mortgages were provided.

“If banks kept the pace, the volumes of mortgages provided could return again to over CZK 200 billion, where they remained between 2016 and 2018. So far, it seems that the coronavirus crisis has not hit the mortgage market too much. However, there is still a risk that another wave of coronavirus may arrive. It is still too early for forecasts, ”points out a Fincentrum & Swiss Life Select specialist.

Rates are falling across the market

After Česká spořitelna, the ČSOB Group and Komerční banka, most other banks also reduced their mortgages. Some banks have lowered mortgage rates several times in a short period of time. While mortgages could continue to fall slightly in price during the summer, the end of the grace period could also bring an increase in interest rates if the number of non-performing loans increased.

“For the first time since last September, it was possible to talk at the beginning of June about a really widespread reduction in mortgages. From June 1, Komerční banka significantly reduced its mortgage rates. It has joined other large banks that have recently taken a similar step. During June, more banks were added, so the wave of cheapening gained momentum. And it doesn’t end in July either. And it won’t end in August either, “predicts Lukáš Kovanda, chief economist of the Czech Fund.

According to him, banks have resorted to lowering rates below two percent as a result of the coronavirus crisis, which is indirectly causing a reduction in market interest rates, from which banks derive their mortgage rates.

“It is likely that mortgages will continue to fall in price. Of course, banks will not say this in full, as this would encourage potential clients to wait until they apply for a mortgage. But that is exactly what seems to be the most sensible approach now. If you don’t really need the property right now, you should wait for it to be acquired. And with a mortgage too. In a year’s time, both real estate and mortgages will be significantly cheaper than today. You can save, for example, hundreds of thousands for the property itself and even thousands for a monthly mortgage payment, “advises Kovanda.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.