CBA Hypomonitor: July surprised with strong volumes, but also numbers of new mortgages
The rate fell slightly further to 4.53%.
Prague, 14 August 2025 - In July 2025, banks and building societies granted new mortgages worth CZK 30 billion. This is a total of CZK 180 billion since the beginning of the year, i.e. CZK 60 billion more than a year ago (last month it was CZK 50 billion more year-on-year). Added to this is the continued strong number of new mortgages at around 7,000. These are not seasonally driven numbers, but it does look like strong mortgage activity, which may reflect a combination of another modest decline in the mortgage rate to 4.53% coupled with concerns about its possible future rise due to higher market interest rates. Adjusting the data for seasonal effects, the volume of new mortgages rose above CZK 29 billion. We have seen volumes like this around the second half of 2021, while seven thousand applications during 2020.
We reflect the risk of a possible rise in mortgage rates coupled with softer mortgage demand in our outlook, where we now assume future dynamics from May and June. Thus, if mortgage rates maintain the momentum of the previous two months, then the volume of new mortgages without refinancing could reach CZK 297bn in 2025, +30% compared to last year. This is a better estimate than a month ago (+2.4%) or the previous three months (CZK 293bn). This is accompanied by a marginally better estimate of the number of new mortgages this year at 72.2k, close to the average annual estimate from the previous three months (72k units).
A 0.54% point year-on-year drop in the mortgage rate reduces monthly repayments by almost CZK 1.4k. CZK, i.e. by 1.5% of the mortgage applicant's net income. However, the average size of a newly granted mortgage further increased to CZK 4.28 million in July, which raised the average monthly repayment by almost CZK 2.8 thousand year-on-year. This is approximately 2.9% of the applicant's income.
This information is based on data from the CBA Hypomonitor, which captures data from all domestic banks and building societies providing mortgage loans.
The central bank's reaction to the stronger July data will depend on the future trajectory of the number of new mortgages, i.e. whether it follows 2020 or 2024 (see chart on the bottom right in the statistical annex below). A 2020 trajectory with new mortgage numbers above 7,500 per month would likely intensify the debate in the Board about tightening interest rate (25 September meeting) or macroprudential policy (11 September meeting). While the 2024 trajectory, i.e. stabilising around six thousand in the second half of this year, would maintain the current wait-and-see approach.
Table 1: Summary of mortgage origination volumes and average interest rates for July 2025 and so far this year
|
|
Monthly values |
|
year-to-date values |
||||
|
|
Volume |
Number |
Rate |
|
Volume |
Number |
Rate |
|
|
|
||||||
|
Total |
37,8 |
9 188 |
4,52 |
|
222,2 |
55 918 |
4,62 |
|
New loans |
30,0 |
6 996 |
4,53 |
|
179,6 |
43 651 |
4,63 |
|
of which: |
|
|
|
|
|
|
|
|
for purchase |
24,1 |
5 494 |
4,52 |
|
143,3 |
34 158 |
4,63 |
|
for construction |
4,4 |
1 059 |
4,49 |
|
27,8 |
6 907 |
4,59 |
|
Other |
1,5 |
443 |
4,75 |
|
8,5 |
2 586 |
4,83 |
|
Refinanced from another institution |
6,5 |
1 835 |
4,49 |
|
34,4 |
10 033 |
4,59 |
|
Refinanced internally, increased |
1,3 |
357 |
4,55 |
|
8,2 |
2 234 |
4,58 |
|
Source.
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|
|
|
|
|
|
|
July surprised with continued strong volume of new mortgages
In July, banks and building societies actually granted new mortgage loans worth CZK 30 billion, and in addition, clients refinanced or increased their mortgages to the extent of CZK 7.8 billion. After seasonal adjustment, the July figures for new mortgages showed a strong increase to around CZK 29.3 billion. This represents an 18.5% improvement on June's figure of CZK 24.7 billion and is also above the average volume of the previous three months (CZK 24.3 billion). The volume of new mortgages granted in July was approximately 77% higher than in the first half of last year. In year-on-year terms, the growth in the volume of mortgage originations picked up again in July to 53% from 39% in June, following an 83% year-on-year increase in the previous year.
"I have recalculated the July mortgage numbers three times as they surprised significantly to the upside, both in volume and numbers.Probably the higher demand reflected the risk of a possible future rise in mortgage rates, which may later be reflected in softer numbers in the coming months," believes Jaromír Šindel, chief economist at the Czech Banking Association.
The number of new mortgages also rose and is close to 2019 levels. The number of new mortgages in July rose 0.9% month-on-month to 6,996, up 34% from a year ago. We estimate the seasonally adjusted number to be around 6,955, around 17% above the average number (5,944) in the previous three months. Year-to-date, the number of new mortgages has reached 43.7 thousand (+31.5% yoy). The momentum in the number of new mortgages in the previous two months implies an increase this year to a total of around 72.2k, which would be almost 17% higher than last year and close to the 72k of 2019.
Chart 1: New mortgages granted without refinancing
In July 2025, banks and building societies granted new mortgages worth CZK 30 billion, 3% more than in June. After seasonal adjustment, the volume rose by almost a fifth month-on-month to CZK 29.3 billion.
Source: CNB, CBA Hypomonitor
The volume of refinanced and increased loans (internally or from another institution) rose to CZK 7.8 billion in July. This is almost double the average volume of CZK 3.9 billion refinanced last year. The share of refinanced loans in the total volume of mortgages granted fell slightly to 20.6%. This is also above last year's average of 16.9%, or above the 17.2% share from 2022-2023, but still below the nearly 29% share from 2020-2021, when households refinanced at a mortgage rate of 2.14%. In July 2025, households refinanced at a rate of 4.5%, but this is still a significant 0.55% point lower than the 5.05% rate a year ago.
"In the first month of the holiday season, we observe that despite the holiday period, mortgage activity of Czechs is slightly increasing, both in volume and in the number and average amount of mortgages granted.The slight decline in interest rates is also a positive signal for the continuation of this trend towards securing one's own home," notes Zdeňka Kovářová, Mortgage and Microlending Manager, UniCredict Bank.
Overall, banks and building societies granted new and refinanced mortgages in the amount of CZK 37.8 billion in July, which is 2.2% more than a month ago. Their total volume so far this year has reached CZK 222 billion, which represents a 56% increase compared to January-July of the previous year.
The average mortgage rate continues its downward trend, at 4.53% in July
The average realised interest rate on new mortgages fell slightly further in July to 4.53% from 4.56% in June. Its reduction thus confirms a downward trend below the 5% last seen in July 2024. Its July level is thus 0.54% points lower than the 5.07% rate a year ago, reducing monthly mortgage repayments by around 1.5% of the applicant's net income, i.e. 1.4k lower than the 5.07% rate a year ago. CZK. By comparison, the average mortgage rate in 2024 was 5.07% compared to 5.81% in 2023.
Chart 2: Average Mortgage Rate - New Business
The July mortgage rate fell to 4.53% with a year-on-year decline of just over half a percentage point.
Source: CNB, CBA Hypomonitor
“The Czech mortgage market maintained its strong year-on-year momentum even in the first month of the summer holidays. With a rarely seen summer volume of new mortgages reaching as much as CZK 30 billion, it confirmed that in the full-year balance it is heading towards the second-strongest year in history. Property prices are breaking new records due to insufficient supply. Buyers are thus taking advantage of the continued decline in average mortgage interest rates to secure their dream home at current prices,” says Martin Vašek, CEO of ČSOB Hypoteční banka.
Market interest rates,[1] which are a key influence on mortgage rates, continued to rise in the Czech Republic in July, further limiting the path for mortgage rates to fall further. Czech five-year interest rate swaps rose 0.15% points to 3.69% in July from 3.54% in June and were above May's 3.38%. Their July level is very close to the average of 3.66% from the previous second quarter. Over the past twelve months, Czech five-year swaps have been in a range of monthly averages of 3.2% (September 2024) and 3.7% (July 2025). Compared with the average level of five-year swaps in 2024, July rates were 0.1% point higher. Also, euro five-year swaps rose to 2.3% in July from 2.23% in June, but were 0.28% point below their average level of 2.58% last year. In contrast, US five-year interest rate swaps fell marginally to 3.83% in July from 3.88% in June and were 0.3% points below their 2024 average.
[1] These are primarily long-dated interest rate swaps (IRS), which reflect the price of money at longer maturities, such as 2 to 10 years.
Domestic factors that influenced interest rate swaps mainly included: 1) the CNB's more hawkish stance after its June meeting, when the Board kept its two-week repo rate at 3.5%. This stance was accentuated after the August meeting and the publication of the hawkish economic outlook; 2) higher core inflation in June contributed to this, while its July reading may bring partial relief; 3) further interest rate increases were prevented by the appreciation of the Czech koruna due to a more supportive interest rate differential.
According to the CBA Hypomonitor, the mortgage rate on new mortgages fell slightly to 4.53% in July and was thus around 0.98% points above average market swap rates. This is approximately 0.1% points below the long-term average since 2014, while in the previous three months this spread to the long-term average was 0.22% points. Unless there is a significant downward correction in market interest rates (which would be possible in a scenario of renewed downside risk associated with tariff wars, further stronger appreciation of the koruna, or a more pronounced cooling of the Czech labour or property market), the current spread between mortgage and market rates is likely to limit further significant mortgage rate declines.
Market long-term rates continued to claw their way higher in July, reinforced by persistently higher core inflation and the CNB's hawkish August forecast
Source: LSEG (11 August 2025), CBA
The average mortgage size exceeded CZK 4.2 million in June. CZK and mortgages to buy signal further growth in the future
The average size of an actual new mortgage rose slightly to CZK 4.28m in July. CZK, i.e. by more than 1% month-on-month. Its size is thus 14% higher than the CZK 3.77m (EUR 3.77m) in the same period last year. CZK a year ago. Taking into account the extraordinary value of almost CZK 4 million, the mortgage rate is still higher than in the previous year. CZK in August 2024 (the impact of new legislation), the average value has been rising steadily since last April and is 24% above the previous record level of CZK 3.46 million set in November 2021. CZK. A gradual decline in mortgage rates or a gradual increase in real household incomes (3.9% y/y in Q1-2025), together with the CNB's continued relaxation of macroprudential income limits (only 80% LTV limit or 90% for applicants under 36 years old), is making it possible to achieve a higher mortgage. Rising mortgage rates are then also linked to the evolution of house prices, which, according to Flat Zone data, maintain strong growth of around 17% y-o-y and 7% q-o-q in Q1 2025 (see CBA Monitor - CBA Monitor or specifically here). CSO data points to apartment price growth of around 15% y/y and an overall house price index of around 10% y/y in Q1 2015 (see comment here)
Chart 3: Average amount of new mortgages actually granted by purpose
"One hundred thousand per month": the average mortgage amount continues to rise to CZK 4.28 million, while the average new mortgage for purchase was close to CZK 4.4 million in July.
Source: CNB, CBA Hypomonitor
Impact on the average monthly mortgage payment of around CZK 23.1 thousand
The combination of the fall in interest rates and the higher average mortgage amount in July 2025 compared to the 2024 averages increased the average monthly mortgage payment by CZK 2.1k. Kc. The scenarios of the evolution of the monthly payment for different mortgage maturities are shown in Table 2. It suggests that a fall in mortgage rates of over 0.5% points relative to their average rate of 5.07% in 2024 would, for an average mortgage size with a typical repayment term of around 26.6 years, reduce the monthly repayment by just under CZK 1 400 to around CZK 23 400 000. This represents a reduction of CZK 1,400,000, i.e. 1,5% of the applicant's net income compared to the average repayment in the previous year. Compared to the average mortgage rate of 5.81% in 2023, the savings due to the interest rate amounted to less than CZK 3 300 for a mortgage at its current average value.
However, the current average mortgage amount is 16% higher than its average amount in 2024, which contributes to an increase in the monthly payment of CZK 3.3k. The average monthly mortgage payment in the previous year is linked to last year's average mortgage amount, but at the current interest rate. The mortgage payment of CZK 1 million with a 30-year maturity at current interest rates is around CZK 5.1 thousand.
Conversely, compared to the average 2.8% mortgage interest rate for new mortgages in 2019, the current refinance mortgage rate of 4.5% when the loan maturity is shortened raises the monthly repayments on the average mortgage by almost CZK 1,700, or about 3.5% of the current gross average wage.
Table 2: Illustration of the average monthly mortgage payment by length of repayment and interest rate
Average size of a new mortgage in CZK:
4 282 234
Average interest rate in %:
2,0
3,0
4,0
4,56
5,0
6,0
Monthly instalment:
Mortgage maturity in years:
15
27 560
29 570
31 680
32 810
33 860
36 140
20
21 660
23 750
25 950
27 150
28 260
30 680
25
18 150
20 310
22 600
23 860
25 030
27 590
26,6
17 310
19 490
21 820
23 100
24 290
26 890
30
15 830
18 050
20 440
21 760
22 990
25 670
Source: CBA [2]
Note: the coloured column corresponds to the interest rate of the latest CBA Hypomonitor, other rates are illustrative; the coloured row corresponds to the average maturity of new mortgages according to CNB data; amounts are rounded to tens of crowns.
[2] The table is available in the xls file attached on the CBA Hypomonitor website
Average size of a new mortgage in CZK: | 4 282 234 | ||||||
Average interest rate in %: | 2,0 | 3,0 | 4,0 | 4,56 | 5,0 | 6,0 | |
Monthly instalment: | |||||||
Mortgage maturity in years: | 15 | 27 560 | 29 570 | 31 680 | 32 810 | 33 860 | 36 140 |
20 | 21 660 | 23 750 | 25 950 | 27 150 | 28 260 | 30 680 | |
25 | 18 150 | 20 310 | 22 600 | 23 860 | 25 030 | 27 590 | |
26,6 | 17 310 | 19 490 | 21 820 | 23 100 | 24 290 | 26 890 | |
30 | 15 830 | 18 050 | 20 440 | 21 760 | 22 990 | 25 670 | |
Source: CBA [2] | |||||||
Note: the coloured column corresponds to the interest rate of the latest CBA Hypomonitor, other rates are illustrative; the coloured row corresponds to the average maturity of new mortgages according to CNB data; amounts are rounded to tens of crowns. | |||||||
[2] The table is available in the xls file attached on the CBA Hypomonitor website
Chart 4: Illustrative comparison of the average monthly mortgage payment with a year ago, depending on the interest rate, mortgage size and maturity in years
In the year-on-year comparison, the decrease in the mortgage rate resulted in a saving of CZK 1,360 in the average monthly payment, but the increase in the average mortgage amount caused an increase of CZK 2,750.
Source: CBA. Note: Amounts are rounded to tens of crowns.
Statistical annex
Source: CBA Hypomonitor
Note: These are actually new mortgages (i.e. without refinancing and increases). The underlying data is available in the xls file attached on the CBA Hypomonitor website
Mortgage market in 2024: record growth of 83%
For the whole year 2024, banks and building societies granted new mortgage loans in the volume of CZK 228 billion. In addition, mortgages were refinanced to the tune of CZK 47 billion, bringing the total mortgage market to CZK 275 billion in 2024 from CZK 150 billion in 2023. If we adjust the volumes for the 5-8% increase in house prices (according to various statistics), the volume of new mortgages grew slightly less in real terms. This corresponds to a more modest 53% year-on-year increase in the number of new mortgages in 2024 to almost 62,000 and a nearly 20% increase in the average amount of a new mortgage granted to CZK 3.7 million. Compared to the pre-pandemic years 2017-2019, the volume of new mortgages granted in 2024 was roughly less than a fifth higher.
Chart 2: Annual volume, number and average amount of mortgages granted between 2020 and 2024
Source: CBA Hypomonitor
CBA publishes summary statistics for the entire banking market
The Czech Banking Association, in cooperation with its member banks, publishes new aggregate statistics on the housing market. These are mainly the volumes and numbers of newly granted and refinanced mortgages and the respective interest rate. These statistics are published by the CBA in aggregate form for the entire banking sector on a regular basis around the middle of each month. All domestic banks and building societies providing mortgages in the Czech Republic participate in the survey. The data are available from January 2020 in the attached file on the website www.cbaonline.cz, where the relevant statistics can also be found separately for banks and building societies. The above figures are for the sector as a whole, which can also be viewed in a simple graphical form on the cbamonitor.cz website.
Methodology of the CBA Hypomonitor
The CBA Hypomonitor divides mortgage loans granted by banks and building societies to households into several categories in order to distinguish new loans from refinanced or internal refixations. New loans are then reported in categories according to the purpose of the loan:
1. new loans
These are loans whose full volume enters the economy for the first time. This category does not include loan consolidations or loan refinancing. It is divided into three categories:
- Purchase of real estate
- Property construction - including property renovation
- Other new arrangements - only new loans that are in no way related to the purchase or construction of the property, e.g. so-called American mortgages, settlement of a JVM, repayment of the purchase price, settlement of an inheritance share, settlement of a cooperative share, etc.
2. Refinanced loans from another financial institution
These are loans that have been originated by refinancing one or more loans from a financial institution other than the reporting one. Irrespective of the amount refinanced and regardless of the amount of any increase, the total amount of the newly originated loan is reported in this category.
3. Loans increased or internally refinanced
These are loans that were already part of the reporting entity's portfolio in the previous reporting period and have undergone one of the following changes during the reporting period:
- an increase in the agreed amount
- changes such that the original loan has been refinanced/converted into a new loan within the reporting entity. This is a genuinely new contract and not, for example, just a new arrangement in the context of a refixation of an existing contract. Therefore, the volume of such loans in the CBA statistics is lower than 'other new arrangements' in the Czech National Bank statistics.
The following banks and building societies provide data for the CBA Hypomonitor: Air Bank, Banka Creditas, Česká spořitelna, ČSOB, ČSOB Stavební spořitelna, Fio banka, Hypoteční banka, Komerční banka, mBank, Modrá pyramida, MONETA Money Bank, MONETA Stavební spořitelna, Oberbank, Partners Banka, Raiffeisen stavební spořitelna, Raiffeisenbank, Stavební spořitelna České spořitelna, UniCredit Bank.