The average mortgage rate at the beginning of August fell to 6.19 percent from 6.24 percent in July, decreasing for the third month in a row. This follows from the data of the Swiss Life Hypoindex, which is processed on the basis of data on the fifth working day of each month. The methodology reflects the current average mortgage loan offer rate for 80 percent of the property’s value.
“Offer mortgage rates from banks have been falling for the third month in a row. However, the drop compared to last month was only in the order of hundredths, and the drop since May was only 0.13 percentage points. This is still more of a cosmetic adjustment than a dramatic change in trend towards lower rates,” said Swiss Life Select mortgage analyst Jiří Sýkora.
The drop in rates since May this year represents a difference of 276 crowns for a mortgage repayment of 3.5 million crowns with a maturity of 20 years.
The monthly installment of a mortgage loan for 3.5 million crowns agreed up to 80 percent of the estimated property price with a maturity of 25 years and an average offer rate of 6.19 percent fell by 118 crowns to 22,950 crowns.
“Mortgage loan repayments are falling as well as the average offer rate for the third month in a row. The last time the average monthly mortgage payment fell below the threshold of 23,000 crowns was in October of last year, when it amounted to 22,991 crowns at an average mortgage offer rate of 6.2 percent,” he added. Tit.
Mortgages fixed for three years fell most significantly in the past month, by eight points. For mortgages up to 80 percent of the mortgage value of the property, the average rate fell to 6.2 percent, and for mortgages for young people under 36 (with a mortgage value of the property above 80 percent) to 6.48 percent.
The average mortgage rate fixed for five years decreased by seven points. It fell to 5.92 percent for mortgages with the mortgage value of the property up to 80 percent, and to 6.2 percent for mortgages for young people. Five points were written off by mortgages with a ten-year fixation, to 6.03 percent for mortgages with a mortgage value of up to 80 percent. Mortgage rates fixed for one year fell by only one point, to 6.6 percent and 6.09 percent, respectively.
At its August meeting, the Banking Council of the Czech National Bank (ČNB) left interest rates unchanged again, in line with expectations. The basic interest rate has remained thus for more than a year and will probably remain at seven percent for some time to come. The prospects for reducing mortgage interest rates are therefore not very likely.
“Just as the CNB did not make any change in the announced rates at the beginning of August, so logically the banks are not approaching any more significant reductions in mortgage rates. Thus, the only driving forces that turn the wheels of the mortgage market are the falling real estate prices and the relaxation of the restrictive DSTI limit.” pointed out Sýkor.
With effect from July 1, the CNB canceled the limit of the DSTI indicator, which determined the maximum share that the total monthly loan repayment can have on the loan applicant’s net monthly income.
2023-08-10 16:35:59
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