People are catching up on cheap mortgages at the last minute. In November alone, they borrowed over 37 billion crowns for housing, the most since June, which was the strongest month in mortgage history. In total, banks have lent over 392 billion crowns for housing since the beginning of the year, almost three quarters more than in the strongest year 2020. The growing interest, which according to statistics from Fincentrum Hypoindex climbed 2.7 percent in November, did not deter those interested in the loan.
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“A larger number of mortgages in November was provided only in 2016, almost 14,400. At that time, however, the volume of mortgages provided did not exceed thirty billion crowns. Compared to October, the volume of agreed mortgages increased by 16 percent and then even increased by 38 percent year-on-year, “said Jiří Sýkora, mortgage analyst at Fincentrum & Swiss Life Select.
While in 2016 concerns about the new Consumer Credit Act supported the huge interest in mortgages, this year it is a fear of further rate hikes and tightening of mortgage income limits set by the central bank.
During November, people completely ignored the ninth monthly rise in mortgage rates in a row. Housing loans finalized during November were almost a third more expensive than at the beginning of the year. However, due to the huge number of processed mortgages, these were loans concluded several months ago, so new applicants paid even incomparably more at the branches.
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“Already, the offer interest rate on new mortgages is around four percent. If the CNB continues to raise interest rates, and so far it is said that it will, then in the spring mortgage interest rates will normally be around five percent, “says Jan Traxler, a private investment adviser.
However, even the mostly rising rates will not prevent the achievement of an absolute Czech mortgage record this year. “The last month remains until the end of the year, yet we can say with absolute certainty that the mortgage market will manage to exceed the limit of 400 billion crowns of agreed mortgages,” emphasizes Sýkora. He expects that banks lend around 420 billion crowns to housing for the whole year.
According to him, people will be motivated to take out mortgages by the beginning of April next year at the latest, when the CNB will again order banks to provide mortgages strictly with regard to the income situation of the applicants and their level of indebtedness.
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