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The average interest rate fell to 2.2 percent last year. These figures come from the Hypoindex, which Fincentrum & Swiss Life Select published on Wednesday.
The Corona crisis helped to reduce the average annual interest rate by almost half a percentage point, because the interest rate ended up at 1.96 percent at the end of 2020. Jiří Sýkora from Fincentrum & Swiss Life Select says that the previous record number of approved mortgages from 2016 and 2017 was exceeded by more than 28 billion crowns.
As recently as May, it looked as if the mortgage market would be just as badly affected by the Corona crisis as other industries. After that, the market quickly recovered and broke record after record. According to Sýkora, it was already clear in November that 2020 would be a record year. The December deals with a total value of 29.5 billion crowns (1.1 billion euros) only confirmed this.
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Mortgage rates fell throughout the year thanks to cheaper resources. This was initiated by the interest rate cuts by the National Bank (ČNB), explains the director of mortgage loans at Raiffeisenbank, Milan Voldřich. At the same time, the ČNB withdrew its recommendation to cautiously distribute loans and gave the banks a free hand in this regard. In addition, real estate prices are currently rising, and there is still a shortage of vacant apartments and houses. So prices couldn’t help but rise, Voldřich adds.
In the past twelve months, the average value of a mortgage in the Czech Republic increased by 365,646 crowns (13,995 euros). Since November 2016, when the value exceeded the two million mark, it has already increased by more than 900,000 kroner (34,447 euros). That’s an increase of more than 30 percent in just four years.
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