CBA Hypomonitor May 2025: more mortgage volume, rate down to 4.60%
Average mortgage rate fell to 4.6%
Prague, 13 June 2025 - In May 2025, banks and building societies granted new mortgages worth CZK 27.4 billion. Compared to April, the volume of activity increased by 5%, supported not only by the seasonal recovery but also by a 2% increase in volume after seasonal adjustment. The average realised mortgage rate contributed positively, falling further to 4.6% in May from 4.65% in April. Its year-on-year decline of less than half a percentage point reduces monthly repayments by CZK 1100, i.e. by approximately 1.2% of the mortgage applicant's net income. However, the stronger mortgage growth in May was also due to the average size of the mortgage, which rose slightly to CZK 4.14 million for a newly granted mortgage. This year-on-year increase contributed to a higher average monthly repayment of just under CZK 3,000, or around 3.1% of the applicant's income. If mortgages maintain the momentum of the last two months, the volume of new mortgages in 2025 could reach CZK 290 billion, more than a quarter higher than last year. This level would remain about halfway between the 2020 (CZK 224bn) and 2021 (CZK 379bn) covenant years for the full year. That's a slightly smaller estimate than last month's, which also reflects a slightly more modest estimate of the increase in new mortgages this year, to 71.7k. The information is based on data from the CBA Hypomonitor, which captures data from all domestic banks and building societies providing mortgage loans.
May brought a slight recovery in new mortgage originations after April's stabilisation
In May, banks and building societies actually granted new mortgage loans worth CZK 27.4 billion, and in addition, clients refinanced their mortgages to the extent of CZK 6.9 billion. Compared with April, new mortgage activity was thus up by around 5% in volume terms, which largely corresponds to a seasonal effect (typically, the volume of new mortgages in May rises by 13% month-on-month; the previous month it fell by 4% compared with the usual -10%). However, after seasonal adjustment, May's new mortgage figures brought a slight, around 2% month-on-month increase to around CZK 24.4 billion. This is in line with the average of CZK 24.4bn in the previous three months (April: CZK 23.9bn). The volume of new mortgages is thus less than half of what it was in the first half of last year. In year-on-year terms, growth in the volume of mortgage originations slowed further to 33% in May from 37% in April and after an 83% year-on-year increase last year.
Table 1: Summary of mortgage origination volumes and average interest rates for May 2025
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|
Volume |
Number |
Rate |
|
|
|||
|
Total |
34,3 |
8 569 |
4,59 |
|
New loans |
27,4 |
6 610 |
4,60 |
|
of which: |
|
|
|
|
for purchase |
21,6 |
5 085 |
4,60 |
|
for construction |
4,3 |
1 107 |
4,56 |
|
Other |
1,4 |
418 |
4,67 |
|
Refinanced from another institution |
5,6 |
1 601 |
4,57 |
|
Refinanced internally, increased |
1,3 |
358 |
4,58 |
|
Source.
|
|
|
|
"A plateau in the number of new mortgages at around six thousand per month suggests that the volume of new mortgages will reach 290 billion in 2025," believes Jaromír Šindel, chief economist at the Czech Banking Association, adding "the increase in the average mortgage amount reflects higher house prices rather than income growth, given that households are left with the same amount of money after paying their mortgage despite rising incomes . "
May also saw a recovery in the number of new mortgages, but these actually weakened slightly after seasonal adjustment. The number of new mortgages in May reached 6,610, 16% higher than a year ago. We estimate the seasonally adjusted number to be around 5,918, around 2% below the average number (6,031) in the previous three months.
Year-to-date, the number of new mortgages has reached 29.7k (+33% y/y). The dynamics of the number of new mortgages in the last two months imply an increase this year to a total of around 71.7 thousand, which would be almost 16% higher than last year and close to the 72 thousand of 2019.
Newly granted mortgages without refinancing
In May 2025, banks and building societies granted new mortgages worth CZK 27.4 billion. Compared to April, activity was 5% stronger in volume terms, supported not only by a seasonal recovery but also by a 2% increase in volume on a seasonally adjusted basis.
Source: CNB, CBA Hypomonitor (pre-2020 volumes are from CNB statistics).
The volume of refinanced and increased loans (internally or from another institution) rose to CZK 6.9 billion in May. This is 76% above the average of 3.9 billion refinanced last year and 221% above the 2.2 billion refinanced in 2023. The share of refinanced loans in total mortgage originations then rose to 20.1%, above last year's average of 16.9%. It is thus 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 May 2025, households refinanced at a rate of 4.57%, but that is still down a significant 0.5% point from 5.05% a year ago.
The average mortgage rate continues its downward trend, at 4.6% in May
The average realised interest rate on new mortgages fell further in May to 4.6% from 4.65% in April. Its reduction thus confirms a downward trend below the 5% last seen in July 2024. Its May level is thus 0.46% points lower than the 5.06% rate a year ago, reducing monthly mortgage payments by around 1.2% of the applicant's net income, i.e. by 1.1k. CZK. By comparison, the average mortgage rate in 2024 was 5.07% compared to 5.81% in 2023.
Average Mortgage Rate - New Business
May'smortgage rate at 4.60% is less than half a percentage point lower than a year ago
Market interest rates [1], which are a key influence on mortgage rates, held at lower levels in May than in the first quarter, but the June upward turn resembles a limited path to lower interest rates. For example, Czech five-year interest rate swaps rose slightly by 0.1% point to 3.4% in May from 3.3% in April, but remain below March's 3.6%. On the other hand, this has brought them back to their late summer 2024 level. However, rather positive or inflationary data in May has so far brought five-year swaps back to 3.4%. The return of market interest rates to higher levels reflects the upward movement in US interest rates, but also domestic factors, in particular: (i) the CNB's hawkish May rate cut to 3.5% with one councillor voting for stability; (ii) May's return of higher Czech consumer price growth to 2.4% y/y with continued strong momentum in core inflation (3.4% annualized); (iii) this is compounded by a continued positive surprise in economic activity with wage growth still inflationary despite higher registered unemployment;
The mortgage rate on new mortgages fell to 4.60% in May according to Hypomonitor.This was approximately 1.3% points above the average market swap rate, which is approximately 0.14% points above the long-term average since 2014. Unless there is a significant upward correction in market interest rates (which would be possible in a scenario where the risk of tariff wars disappears, i.e., with stronger economic growth), then the current gap between mortgage rates and market rates should contribute to a further decline in mortgage rates.
[1] These are primarily long-dated interest rate swaps (IRS), which reflect the price of money at longer maturities, for example 2 to 10 years.
Long-term market rates have remained unchanged since the second half of last year
The spreadsheet is available in an xls file attached on the CBA Hypomonitor website
Average mortgage size rose slightly in April, but more so for mortgages for purchase
The average size of an actual new mortgage in May rose slightly to CZK 4.14m. This is more than 1% month-on-month. It is thus above the 4 million mark for the fourth month in a row. Its size is thus 15% higher than the 3.61 million mortgage rate in the same period last year. CZK 1.61 million a year ago. Taking into account the extraordinary value of almost CZK 4 million, the figure is also higher than the previous year. CZK in August 2024 (the impact of new legislation), the average value has been rising steadily since April last year and is 20% above the previous record level of CZK 3.46 million set in November 2021. CZK. The gradual decline in mortgage rates or the gradual growth in real household incomes (3.9% yoy in Q1-2025), together with the continued relaxation of macroprudential income limits by the CNB (only 80% LTV limit or 90% for applicants under 36 years old), make it possible to achieve a higher mortgage. Mortgage rates are then also linked to house prices, which, according to Flat Zone data, maintain strong growth of around 17% YoY and 7% QoQ in Q1 2025 (see CBA Monitor - CBA Monitor or specifically here).
Average amount of new mortgages actually granted by purpose
The average mortgage amount continues to rise to CZK 4.14 million, while the average new mortgage for purchase in May already reached CZK 4.24 million
Impact on the average instalment
The combination of the fall in the interest rate and the higher average mortgage amount in May 2025 compared to the 2024 averages increased the average monthly mortgage payment by CZK 1.5k. 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 almost 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 1 200 to around CZK 22 500. This is a reduction of 1.2% 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 3,000 for a mortgage at its current average value.
However, the current average mortgage amount is 13% higher than its average amount in 2024, which contributes to an increase in the monthly payment of CZK 2.5k. The mortgage payment of CZK 1 million with a 30-year maturity is around CZK 5.1 thousand at current interest rates.
Conversely, compared to the average 2.8% mortgage interest rate for new mortgages in 2019, the current refinance mortgage rate of 4.57% when the loan maturity is shortened raises the monthly repayments on the average mortgage by approximately more than CZK 1,700, or about 3.8% of the current gross average wage.
Illustration of the average monthly mortgage payment depending on the length of repayment and interest rate
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Average size of a new mortgage in CZK: |
|
|
4 141 476 |
||||
|
Average interest rate in %: |
|
2,0 |
3,0 |
4,0 |
4,60 |
5,0 |
6,0 |
|
|
|
|
|
Monthly instalment: |
|||
|
Mortgage maturity in years: |
15 |
26 650 |
28 600 |
30 630 |
31 880 |
32 750 |
34 950 |
|
20 |
20 950 |
22 970 |
25 100 |
26 410 |
27 330 |
29 670 |
|
|
25 |
17 550 |
19 640 |
21 860 |
23 240 |
24 210 |
26 680 |
|
|
|
26,6 |
16 750 |
18 850 |
21 100 |
22 510 |
23 490 |
26 000 |
|
|
30 |
15 310 |
17 460 |
19 770 |
21 220 |
22 230 |
24 830 |
|
Source: CBA [1] |
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|
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. |
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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 1,140 in the average monthly payment, but the increase in the average mortgage amount caused an increase of CZK 2,860
Source. Note: Amounts are rounded to tens of crowns.
Statistical annex
Note: These are actually new mortgages (i.e. refinancing and increases). The underlying data is available in the xls file attached on the CBA Hypomonitor websiteMortgage 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 nearly 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.
Full-year volume, number and average amount of mortgages granted between 2020 and 2024
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.
CBA Hypomonitor methodology
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, Raiffeisen stavební spořitelna, Raiffeisenbank, Stavební spořitelna České spořitelna, UniCredit Bank.