Mortgage loan prices were largely flat for the next month in a row. Average offer rate of mortgage loans according to Swiss Life Hypoindex changed so far +5.32% compared to yesterday.
“The rate only dropped two basis points. A smaller month-on-month decrease was recorded by the index only in June this year, when its value decreased by one basis point,” says a mortgage analyst at Swiss Life Select. Jiří Sykor while it still proves that nothing is forcing the banks to cut rates either.
Therefore, with stagnation, the monthly mortgage loan payment calculation does not change. Regarding a special loan for 3.5 million kroner negotiated up to 80 percent of the real estate estimated price (LTV) with a maturity of 25 years and an average offer rate of 5.32 percent, it ended up being 21,116 kroner in the Samhain In October, at an average offer rate of 5.34 percent, it was in the amount of 21,155 crowns – so it fell by only 39 crowns month after month.
Since the beginning of the year, the monthly allowance has decreased by almost 1,400 crowns on average, as in January the monthly allowance was 22,472 CZK. Even that shows how little rates have changed this year.
There will be no further reduction in rates this year
According to Jiří Sýkora, the reason for the stagnation may be that the banks have already fulfilled this year’s plans in terms of granted loans or that they are covering losses from the time when rates were lower lower than two percent with higher margins.
“There is no expectation of a significant reduction in mortgage rates before the start of next year. In the worst case, just as part of the spring promotional offers, which are expected to stimulate the mortgage market after the winter holidays every year, “said Sýkora.
Mortgage offers with lower rates have already appeared on the market, but this change is still not enough to have a significant impact on the overall trend. Unless one of the biggest players in the mortgage market decides to significantly lower rates and boost competition, big changes won’t happen.
According to Tom Kadeřábek, head of the Swiss Life Select product division, banks are not in a hurry to discount now, because they would “cannibalize” older loans with higher rates with lower rates.
These clients would logically want to refinance early at a lower rate, which would mean a loss for the bank.
“Currently, due to higher margins, banks create reserves in case of early repayments and thus pass the costs on to customers. The situation has not improved even with the new legislation, which allows banks to apply a slightly higher fee for early repayment,” said Kadeřábek.
According to experts in the field of mortgage loans, this fee is not nearly enough for banks, moreover, it only applies to new contracts that ended after September 1 of this year.
According to mortgage expert Broker Trust Freedom Ostaka Banks are now pricing the risk of early exit for individual mortgages around 0.3 to 0.5 percent higher.
“If the bank should really charge a loss, that could be hundreds of thousands of kroner for the client,” said an Urras Broker expert.
2024-11-05 23:00:00
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