CBA Hypomonitor: Higher Rates Cooled the Mortgage Market in July, but Not Its Strength

Prague, August 14, 2026 – In July 2026, banks and building societies issued 30.8 billion CZK in new mortgages (excluding refinancing). This represented a 16% month-over-month decline, which, however, was in line with the usual summer slowdown. After adjusting for seasonal factors, volumes remained essentially at June’s level. Since the beginning of the year, the volume of new mortgages has reached CZK 247 billion, which is CZK 67 billion more than in the same period last year. The average interest rate on new mortgages rose from 4.79% in June to 4.9%. However, it remains below the level that would be suggested by the usual spread relative to market interest rates. This information is based on data from the CBA Hypomonitor, which tracks data from all domestic banks and building societies providing mortgage loans.

The weaker July figures, similar to those in June, reflected the fading of the previous pre-stockpiling effect. Some clients took out mortgages earlier in an effort to avoid the impact of higher market rates as well as the CNB’s April tightening of rules for so-called investment mortgages. The lower share of these loans likely also contributed to the decline in the average amount of new mortgages to below 4.6 million CZK. As a result, the average monthly payment on new mortgages remained below 26,000 CZK despite higher interest rates. The impact of higher rates is also more evident in refinanced mortgages, where rates remain below those of new loans, though the difference is smaller than in May and June.

Despite the weaker July results, the mortgage market has not entered a phase of significant slowdown compared to previous months this year. Both the number and volume of new mortgages remain close to the strong levels seen in the second half of last year. The July figures are likely to support the central bank’s wait-and-see approach when it adjusts its macroprudential policy for mortgages on September 10. More on this in the CBA Monitor.

Table 1: Summary of Mortgage Volume and Average Interest Rates for July 2026

Source: CBA Hypomonitor. Note: Seasonally unadjusted data

Jaromír Šindel, Chief Economist of the Czech Banking Association:

“Stricter central bank regulations, rising mortgage rates in response to higher market interest rates, and the continued increase in real estate prices kept the mortgage market in a more subdued state in July as well. At the same time, the decline in the average mortgage amount suggests that the share of investment mortgages in the market has likely decreased. Overall, however, mortgage activity remains at the strong levels we observed in the second half of last year.”

Note: The outlook through the end of the year is indicative—it is based on the current trend, not on a model prediction. For the remainder of the year, it assumes a 7% adjustment in the number of mortgages relative to the pace recorded in the second half of 2025. See Chart 7 for an illustration.

Mortgage activity slowed during the summer, but both volumes and numbers remain close to the strong levels seen in the second half of last year

Overall, banks and building societies reported new unconsolidated business in July in the form of new and refinanced mortgages totaling CZK 40.4 billion, which is 17.4% less than a month ago. Year-over-year, the figure rose by 7%. Their total volume so far this year has reached CZK 334 billion, representing a 50% increase compared to January through July of the previous year.

In July, banks and building societies actually provided new mortgage loans (excluding refinancing) totaling CZK 30.8 billion. Compared to June, new mortgage activity thus declined by approximately 16% in volume, which roughly corresponds to seasonal factors. In July, the volume of new mortgages typically declines by about 17% month-over-month, whereas in the previous month the decline was 4% compared to the usual 7%. After seasonal adjustment, the July volume of new mortgages increased by 2.3% to CZK 30.1 billion from CZK 29.4 billion in June. However, it remained below the average of the previous three months, which was CZK 35.1 billion. Compared to the second half of last year, the volume of new mortgages granted in July was approximately 3% higher. Year-over-year growth in the volume of mortgages granted in July slowed further to 3% from 25% in June, while last year’s average year-over-year increase was 41%.

Jakub Vávra, mortgage expert at Komerční banka:

“Following a period of increased interest in mortgages in connection with the entry into effect of the CNB’s new recommendation regarding the provision of investment mortgages, the market is now reacting to rapidly changing funding costs, which are primarily influenced by the geopolitical situation.”

The number of new mortgages in July fell by 14% month-over-month to 6,706 and was down 4% year-over-year. After seasonal adjustment, we estimate the number of new mortgages at around 6,669, which is approximately 10% below the average of the previous three months, which stood at 7,410. Since the beginning of the year, 52,200 new mortgages have been granted, a 20% increase year-over-year. If the trend from the last three months—that is, from May through July—continues, the total number of new mortgages for the year could reach roughly 85,100. However, following the CNB’s tightening of conditions in April and amid higher market interest rates, weaker numbers of new mortgages can be expected. Assuming a 7% slowdown compared to the pace of the second half of last year, this year could end with around 82,000 new mortgages—still 8.4% higher than last year. Such a result would remain below the average of around 92,000 from 2016 to 2018 and significantly below the 114,000 recorded in 2021.

Chart No. 2: Newly Granted Mortgages Excluding Refinancing

July brought another correction to selected metrics of new mortgage lending activity …

Source: Czech Banking Association, CNB, CZSO, Flat Zone.

Chart 3: Average Mortgage Amount by Purpose

… thanks in part to the average mortgage amount falling back below spring levels.

Source: CNB, CBA Hypomonitor

The volume of refinanced and increased loans—whether internally or from another institution—fell to 9.6 billion CZK in July. However, this was still 36% higher than last year’s average monthly volume of refinanced loans, which stood at CZK 7.1 billion, and 145% higher than in 2024, when this volume amounted to CZK 3.9 billion. The share of refinanced loans in the total volume of mortgages granted fell to 23.8% from 25.4% in June. However, it remains above last year’s average of 21% and above the 17% share from 2022–2023, though it is below the nearly 29% share seen in 2020–2021, when households refinanced at a rate of 2.14%.

The average rate on refinanced mortgages reached 4.83% in July 2026. It thus remained below the 4.9% rate on new mortgages, though the difference was smaller than in May and June, when it stood at roughly 0.18 percentage points. Higher refinancing volumes reflect the convergence of longer-term fixed-rate periods from the era of low interest rates that are coming to an end and shorter-term fixed-rate periods from the recent period of higher rates. For more on the growing wave of mortgage rate resets, see the CBA Focus: The Wave of Mortgage Refinancing Is Gaining Momentum, but the Interest Rate Shock Is Easing. Higher Inflation Remains a Risk.

Milan Voldřich, Product Manager for Home Loans at Raiffeisen Bank:

“July brought the mortgage market’s first significant reaction to rising interest rates. The average rate on new mortgages rose to 4.9%, even though the previous increase in market reference rates—which escalated in July—has not yet been fully reflected in this figure. Current mortgage offer rates at most banks are already above the five percent mark. At the same time, however, it is important to note that July is traditionally a weaker month due to the summer holidays. Despite this seasonal slowdown, the mortgage market is showing solid activity and appears to confirm a return to a long-term sustainable pace rather than the onset of a more significant downturn.”

The average mortgage rate rose further to 4.9%; higher market interest rates are gradually being reflected in mortgage rates

The average interest rate on new mortgages rose further in July to 4.9% from 4.79% in June. The July rate is thus 0.37 percentage points higher than the 4.53% rate a year ago, which increases the illustrative average monthly payment on a new mortgage by 1,000 crowns—approximately 1% of the applicant’s net income. By comparison, the average mortgage rate in 2025 reached 4.58%, compared to 5.07% in 2024.

At 4.9%, the July mortgage interest rate was approximately 0.6 percentage points above average market interest rate swap rates. This is still just under half a percentage point below the long-term average since 2014, which stands at 1.04 percentage points. Between March and May, this spread relative to market rates even reached 0.37 percentage points. In our study , we highlighted structural factors—primarily the strength of demand in a competitive market—that influence the pass-through of market rates to mortgage rates. However, a new survey suggests that in the third quarter, there may be a lack of momentum to keep mortgage rates significantly below market swap rates. For more details, see here: Mortgage standards have tightened, but strong demand was not the only factor dampening the impact on lending conditions.

Among the domestic factors influencing the development of interest rate swaps was, above all, persistently elevated core inflation. In June, this contributed to the Czech National Bank’s decision to raise the interest rate to 3.75%. Although the CNB left the rate unchanged in August, the 3% year-over-year growth in core inflation in July is likely to keep the Bank Board on a more cautious, hawkish stance. Added to this is the solid performance of the Czech economy, including growth in industrial wages. For more on these factors, see the analyses on CBA Monitor: The CNB is waiting for a new impetus and is counting on less inflationary economic growth, Four Stories from the June Data: Energy, Exports, Wages, and Housing Starts.

Czech longer-term market interest rates,[1] which have a key impact on mortgage rates—where three-year fixed-rate terms predominate—remained at elevated levels in both July and August. Czech five-year interest rate swaps rose slightly in July by one-tenth of a percentage point to 4.35% from 4.26% in June, but remained below May’s 4.39%. Their July level thus roughly corresponded to the second-quarter average. In the first half of August, however, they returned to 4.4%. Similarly, U.S. five-year swaps rose to 4.36% in July, whereas at the beginning of the year they were below 3.8%. Euro-denominated five-year swaps also rose, reaching 3% from New Year’s levels of just over 2.5%. Over the past twelve months, Czech five-year swaps have fluctuated between a monthly average of 3.6% in February 2026 and 4.39% in May 2026. Compared to the 2025 average, July rates were 0.7 percentage points higher.

[1] These are primarily long-term interest rate swaps (IRS), which reflect the cost of money over longer maturities—in recent years, around 3 to 5 years— but the entire 2- to 10-year curve remains relevant, even though 10-year maturities are less relevant due to higher central bank rates compared to the previous decade, as well as due to the costs incurred when prepaying mortgages.

Chart 4: Average Mortgage Interest Rate – New Loans

Mortgage rates in July continued to respond to the previous sharp rise in market rates

Source: CNB, CBA Hypomonitor

Chart 5: Renewed U.S. attacks on Iran are keeping market swap rates higher

… which in August returned to levels even higher than those seen in mid-2024

Source: Macrobond (August 12, 2026), CBA

The average monthly payment on a new mortgage remained below 26,000 CZK, and the median payment below 21,000 …

The combination of higher interest rates and a higher average mortgage amount in July 2026 increased the average monthly payment on a newly issued mortgage by 2,900 Kč compared to the average values for 2025. Table 2 illustrates scenarios for the development of monthly payments for various mortgage terms. It shows that an increase in mortgage rates of more than 0.3 percentage points from their average level of 4.58% in 2025 would increase the monthly payment on an average mortgage with a typical term of approximately 26.9 years by just under 800 CZK to roughly 25, 600 CZK. This corresponds to approximately 0.8% of the applicant’s net income compared to last year’s average payment.

At the same time, the current average mortgage amount was 9% higher than the 2024 average, which in itself increases the monthly payment by 2,100 Kč. This is a comparison with a payment calculated based on last year’s average mortgage amount, but at the current interest rate. The monthly payment on a one-million-koruna mortgage with a 30-year term is around 5,300 CZK at current rates.

Compared to the average mortgage rate of 2.33% for new mortgages in 2021, the current refinancing rate of 4.83%—combined with a shorter loan term—increases the monthly payment on an average mortgage by nearly 3,200 CZK. This corresponds to approximately 6.2% of the current gross average wage. However, that wage has risen by 33% since the end of 2021. We discussed the impacts and circumstances in Fokus CBA: The wave of mortgage rate resets is gaining momentum, but the interest rate shock is subsiding. Higher inflation remains a risk.

Table 2: Illustration of Monthly Payments for Average and Median Mortgages Based on Loan Term and Interest Rate

Source: CBA (the table with values and explanation of median values is available in an XLS file attached to this report). Note: The colored bar corresponds to the interest rate of the latest CBA Hypomonitor combined with the usual maturity, other rates are illustrative. The coloured row corresponds to the average and median maturity of new mortgages according to CBA data; amounts are rounded to the nearest ten kroner. The median repayment amount is based on the median mortgage size. It is calculated on the basis of the ratio of the average and median size of new mortgage loans over the last three quarters according to CNB statistics (118,7%). The calculation also assumes an average maturity of 30 years (corresponding to the median) and an average interest rate, since the difference between the average and median rates is negligible in the long run (approximately 0.045 percentage points). The median, unlike the average, represents a ´typical´ value - half of the loans are lower and half are higher - and is not affected by outliers.

… thanks to a further decline in the average size of newly granted mortgages to below 4.6 million CZK

The average size of newly originated mortgages fell slightly in July to CZK 4.59 million, a decrease of nearly 2% month-over-month. However, it was still 7% higher than in July of last year. The higher average mortgage amount at the beginning of this year—when it reached CZK 4.85 million between March and May—likely reflected the lingering effect of pre-stockpiling for so-called investment mortgages. For these, the CNB has tightened the requirements—specifically, the LTV to 70% and the DTI to seven times annual income. Based on CNB data from the Financial Stability Report, we estimate that the average amount of an investment mortgage— i.e., mortgages for additional owner-occupied housing or rental properties, was roughly 29% higher last year and in the first quarter of this year than for owner-occupied mortgages and other truly new mortgages.

The average mortgage amount is also closely linked to real estate price trends. Even in the first quarter, they slowed only slightly to 10%. Asking prices in the first quarter of 2025 accelerated slightly to 2.7% quarter-over-quarter, which still exceeds their long-term average increase of 1.8%. Actual apartment prices slowed to approximately 2.5% quarter-over-quarter in the first quarter, with the growth rate differing significantly between Prague and the rest of the country. According to data from Flat Zone, the average transaction price for both new and older apartments in the Czech Republic reached 98,000 CZK/m² in the first quarter of this year (see charts on CBA Monitor) following a 4.7% year-over-year increase. At the same time, market development is supported by the gradual growth in real household wages (8.1% year-over-year in Q1-2026; see chart here).

Chart 6: Illustrative comparison of monthly payments for the current average newly issued mortgage versus the same period a year ago, based on the interest rate, mortgage amount, and loan term in years

In a year-over-year comparison, the rise in mortgage rates led to an increase in the average monthly payment of 1,000 CZK, while the increase in the average mortgage amount caused the payment to rise by 1,750 CZK. However, the average mortgage amount has been declining over the past two months, which offset the impact of the higher interest rate.

Source: CBA. Note: Amounts are rounded to the nearest ten crowns.

Statistical Appendix

Chart 7: Seasonality of New Mortgage Loans

Source: CBA Hypomonitor

Note: These are truly new mortgages (i.e., excluding refinancing and loan increases). The underlying data are available in an XLS file attached to the CBA Hypomonitor website. The outlook through the end of the year (fcst) is a snapshot—it is based on the current trend, not on a model prediction. However, for the remainder of the year, it assumes a 7% adjustment in the number of mortgages relative to H2-2025.

Chart 8: Breakdown of New Mortgage Loans by Purpose

Source: CBA Hypomonitor

Note: The latest figure represents the average for the past 12 months. The interpretation of the “other” segment may be distorted by the inclusion of so-called “mortgages without real estate” arranged without a specific purpose. For more details, see the methodological note below.

The mortgage market in 2025 saw strong growth of 41% in volume and nearly a quarter in the number of loans

Throughout 2025, banks and building societies provided new mortgage loans totaling 321 billion CZK. This is 93 billion CZK more than the 228 billion CZK issued in 2024. This year-over-year jump represents a 41% increase. In addition, mortgages totaling 85 billion CZK were refinanced, bringing the total mortgage market to 406 billion CZK in 2025, up from 275 billion in 2024. If we adjust the volumes for the rise in apartment prices of around 15–16% (according to various statistics), the volume of new mortgages increased by slightly less in real terms. This also corresponds to a more moderate increase in the number of new mortgages in 2025—by just under a quarter to more than 76,110—and a nearly 15% increase in the average amount of new mortgages granted to 4.21 million CZK.

New mortgages in 2025 were financed at an average interest rate of 4.58%, which was half a percentage point lower than in 2024, while the spread relative to the market swap yield curve reached just under one percentage point, which is slightly below the long-term average. The average monthly mortgage payment in 2025 reached just under 22,800 CZK, which is 8.6% more than in 2024, and likely slightly exceeded last year’s increase of more than 7% the average nominal wage. The average year-over-year increase in the monthly mortgage payment of approximately 1,800 korunas in 2025 primarily reflected a higher average mortgage amount, with an increase in the payment of nearly 2,900 korunas, while the lower mortgage interest rate reduced the average monthly payment by more than 1,200 CZK.

Chart 1: Annual Volume, Number, and Average Amount of Mortgages Granted from 2020 to 2025

Source: CBA Hypomonitor

The Czech Banking Association Publishes Aggregate Statistics for the Entire Banking Market

The Czech Banking Association, in cooperation with its member banks, publishes new summary statistics on the housing market. These primarily cover the volumes and numbers of newly issued and refinanced mortgages, as well as the corresponding interest rates. The CBA publishes these statistics in aggregated form for the entire banking sector on a regular basis, typically around the middle of each month. All domestic banks and building societies providing mortgages in the Czech Republic participate in the survey. The data is available starting in January 2020 in the attached file at www.cbaonline.cz, where the relevant statistics can also be found separately for banks and building societies. The figures listed above apply to the sector as a whole and can also be viewed in a simple graphical format on the website cbamonitor.cz.

CBA Hypomonitor Methodology

The CBA Hypomonitor classifies mortgage loans provided by banks and building societies to households into several categories in order to distinguish new loans from refinanced loans or internal rate adjustments. New loans are then reported in categories based on the purpose of the loan:

1. New Loans

These are loans whose full amount enters the economy for the first time. Loan consolidation or refinancing does not fall into this category. They are divided into three subcategories:

· Purchase of real estate

· Real estate construction —including real estate renovation

· Other new agreements – only new loans that are in no way related to the purchase or construction of real estate (which does not apply in the case of so-called “mortgages without real estate” arranged without a specific purpose), i.e., for example, so-called “American mortgages,” settlement of joint marital property, reimbursement 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 were created by refinancing one or more loans from a financial institution other than the reporting institution. Regardless of the amount refinanced and regardless of the amount of any increase, the total amount of the newly created loan is reported in this category.

3. Increased or Internally Refinanced Loans

These are loans that were already part of the reporting entity’s portfolio in the previous reporting period and for which one of the following changes occurred during the reporting period:

· an increase in the agreed amount

· changes occurred such that the original loan was refinanced or converted into a new loan within the reporting entity. This constitutes a truly new contract, not, for example, merely a new arrangement as part of the refixing of an existing contract. Therefore, the volume of such loans in the CBA statistics is lower than that of “other new arrangements” in the Czech National Bank’s statistics.

Data for the CBA Hypomonitor are provided by the following banks and building societies: Air Bank, Česká spořitelna, ČSOB, ČSOB Stavební spořitelna, Fio banka, ČSOB Hypoteční banka, Komerční banka, mBank, Modrá pyramida, MONETA Bank, Oberbank, Partners Banka, Raiffeisen stavební spořitelna, Raiffeisenbank, Stavební spořitelna České spořitelny, and UniCredit Bank.