CBA Hypomonitor: Lower June rate to 4.56% brought a recovery in new mortgages
In June 2025, banks and building societies granted new mortgages worth CZK 29.4 billion.
Prague, 15 July 2025 - In June 2025, banks and building societies granted new mortgages worth CZK 29.4 billion. Compared to May, activity increased by 7% in volume terms, which is more in line with the seasonal effect. However, there was a slight improvement even after seasonal adjustment, including the number of new mortgages. The year-to-date total is CZK 150 billion, up CZK 50 billion from a year ago. Despite the rise in market interest rates, June brought a further fall in the average realised mortgage rate to 4.56% from 4.6% in May. Its year-on-year decline of 0.49% points reduces monthly repayments by approximately more than 1.2k. This represents 1.3% of the mortgage applicant's net income. However, the average size of a newly granted mortgage rose slightly to CZK 4.21 million in June, raising the average monthly instalment by almost CZK 2.7 thousand year-on-year. This means that the monthly monthly income of the applicant increased by approximately 2.9%. The higher level of the average mortgage to purchase signals further future increases in the average mortgage amount. If mortgages maintain the momentum of the last two months, the volume of new mortgages in 2025 could reach CZK 294 billion, 29% more than last year. This represents a marginally better estimate than last month, but close to the estimates from March and April. This reflects a slightly more modest estimate of 71.4k new mortgages this year. This information is based on data from the CBA Hypomonitor, which captures data from all domestic banks and building societies providing mortgage loans.
June brought a slight recovery in new mortgage originations, both in volume and number
In June, banks and building societies actually granted new mortgage loans worth CZK 29.4 billion, and in addition, clients refinanced their mortgages to the extent of CZK 8.1 billion. However, even after seasonal adjustment, the June figures for new mortgages rose slightly to around CZK 24.9 billion. This represents a 2% improvement on May's CZK 24.4 billion and is also above the average volume of the previous three months (CZK 24.5 billion). The volume of new mortgage originations in June was approximately 50% higher than in the first half of last year. In year-on-year terms, the growth in the volume of mortgage originations in June strengthened to 40% from 33% in May, following an 83% year-on-year increase in the previous year.
Table 1: Summary of mortgage origination volumes and average interest rates for June 2025
| Volume | Number | Rate |
| |||
Total | 37,5 | 9 265 | 4,55 |
New loans | 29,4 | 6 990 | 4,56 |
of which: | | | |
for purchase | 23,2 | 5 428 | 4,56 |
for construction | 4,7 | 1 147 | 4,51 |
Other | 1,4 | 415 | 4,75 |
Refinanced from another institution | 6,7 | 1 916 | 4,51 |
Refinanced internally, increased | 1,4 | 359 | 4,52 |
Source.
"The mortgage rate fell further to 4.56% in June despite an upward correction in market interest rates, which will probably limit further declines in mortgage rates in the future, " says Jaromír Šindel, chief economist at the Czech Banking Association, adding that "Czech mortgage rates are well below the approximately 7% level in Poland and Hungary, although they are less than one percentage point higher than in Slovakia or Germany, but with approximately the same spread to five-year market rates."
The number of new mortgages rose slightly but remains at 2019 levels. The number of new mortgages rose 5.7% month-on-month in June to 6,990, up 24% from a year ago. We estimate the seasonally adjusted number to be around 5,952. Although there was a slight 0.6% month-on-month improvement, the number of mortgages remains around 1% below the average number (6,037) in the previous three months. Since the beginning of the year, the number of new mortgages has reached 36.7 thousand (+30.5% yoy). The dynamics of the number of new mortgages in the last two months implies an increase this year to a total of around 71.4k, which would be almost 16% higher than last year and close to the 72k of 2019.
Chart 1: New mortgages granted without refinancing
In June 2025, banks and building societies granted new mortgages worth CZK 29.4 billion. Compared to May, activity was 7% stronger in volume terms, supported not only by a seasonal recovery but also by a 2% increase in volume on a seasonally adjusted basis to CZK 24.9 billion.
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 8.1 billion in June. This is 107% above the average of 3.9 billion refinanced last year and 277% above the 2.2 billion refinanced in 2023. The share of refinanced loans in total mortgage originations then rose to 21.6%, 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 June 2025, households refinanced at a rate of 4.51%, but that is still down a significant 0.5% point from 5.05% a year ago.
"Mortgage rates continue to return to long-term normal, which is reflected in stable demand for mortgages. Despite this positive development, we cannot ignore the fact that property prices continue to rise and housing remains financially unaffordable for a large part of the population. Therefore, it is crucial that, in addition to the revival of owner-occupied housing, investments in quality rental housing go hand in hand - both by banks and the state," notes Petra Skrbková, Director of the Housing Team at Česká spořitelna.
Overall, banks and building societies granted new and refinanced mortgages in the amount of CZK 37.5 billion in June, which is 9.3% more than a month ago. Their total volume so far this year has reached CZK 185 billion, which represents a 56% increase compared to January-June of the previous year.
The average mortgage rate continues its downward trend to 4.56% in June
The average realised interest rate on new mortgages fell further in June to 4.56% from 4.6% in May, confirming a downward trend to below the 5% last seen in July 2024. Its June level is therefore 0.49% points lower than the 5.05% rate a year ago, reducing monthly mortgage repayments by around 1.3% of an applicant's net income, or £1.2k. 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 June mortgage rate fell to 4.56%, maintaining its year-on-year decline of less than half a percentage point.
Source.
"June's numbers confirm once again that, barring anything dramatic, the mortgage market is headed inexorably for its second most successful year on record. However, it is hard to compare with 2021, when rates were around 2% in the first half of the year, whereas today the average mortgage rate is more than double that. Mortgages are being driven up mainly by dynamic house price growth and also by the expectation that interest rates will not get much cheaper any time soon. Thanks to the experience of the last two years, many households no longer want to wait for a better "property price vs. rate" ratio and are investing in real estate now, says Ondřej Šuchman, mortgage manager at Komerční banka Group.
Market interest rates,[1] which are a key influence on mortgage rates, continued to correct upward in the Czech Republic in June, again suggesting a limited path to further significant declines in mortgage rates. Czech five-year interest rate swaps rose less than two-tenths of a percent in June to 3.54% from 3.38% in May. Although they were above April's 3.29%, their June level is less than a tenth of a percentage point below the 3.45% of the previous first quarter. Over the past twelve months, Czech five-year swaps have ranged between monthly averages of 3.19% (from September 2024) and 3.64% (from January 2025). Compared to the average level of five-year swaps in 2024, June rates were 0.04 percentage point lower. US five-year interest rate swaps fell to 3.88% in June from 3.92% in May and were 0.24% points below their average level in 2024. Euro five-year swaps were essentially unchanged at 2.23% in June and were 0.35% points below their average level last year of 2.58%.
Domestic factors that influenced the interest rate swaps mainly included: (i) a more hawkish stance by the CNB, which kept its two-week repo rate at 3.5%; (ii) higher core inflation in May and hence in June; (iii) still solid economic activity in April, which continued in May, albeit with weaker industrial activity; and (iv) further interest rate rises were prevented by the strengthening of the Czech koruna due to a more supportive interest rate differential.
The mortgage rate on new mortgages fell to 4.56% in June according to the CBA Hypomonitor and was thus approximately 1.13% points above the average market swap rates. This is approximately 0.05% points above the long-term average since 2014, while in the previous three months this spread to the long-term average was 0.25% 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 or in the event of a more significant 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 corrected sharply upwards in June due to persistently higher core inflation
Source.[1] These are mainly long-term interest rate swaps (IRS), which reflect the price of money at longer maturities, for example 2 to 10 years.
[2] The table is available in the xls file attached on the CBA Hypomonitor website
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 4.21m in June. The size of the new mortgage is thus 13% higher than theCZK 3.72 million in the previous month. CZK a year ago. Taking into account the extraordinary value of almost CZK 4 million, the mortgage rate was down by 2.7%. CZK in August 2024 (the impact of new legislation), the average value has been rising steadily since last April and is 22% 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
The average mortgage amount continues to rise, to CZK 4.21 million, with the average new mortgage for purchase approaching CZK 4.3 million in June.
Source.
Impact on the average monthly mortgage payment of around CZK 22.8 thousand
The combination of the fall in interest rates and the higher average mortgage amount in June 2025 compared to the 2024 averages increased the average monthly mortgage payment by CZK 1.8k.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 % point 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 1 300 to around CZK 22 800 000. This is a reduction of 1.3% 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 more than CZK 3,100 for a mortgage at its current average value.
However, the current average mortgage amount is 15% higher than its average amount in 2024, which contributes to an increase in the monthly payment of CZK 2.9k. 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 4.51% when the loan maturity is shortened raises the monthly repayments on an 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: | | | 4 210 394 | ||||
Average interest rate in %: | | 2,0 | 3,0 | 4,0 | 4,56 | 5,0 | 6,0 |
| | | | Monthly instalment: | |||
Mortgage maturity in years: | 15 | 27 090 | 29 080 | 31 140 | 32 350 | 33 300 | 35 530 |
20 | 21 300 | 23 350 | 25 510 | 26 780 | 27 790 | 30 160 | |
25 | 17 850 | 19 970 | 22 220 | 23 560 | 24 610 | 27 130 | |
| 26,6 | 17 020 | 19 170 | 21 450 | 22 810 | 23 880 | 26 440 |
| 30 | 15 560 | 17 750 | 20 100 | 21 490 | 22 600 | 25 240 |
Source. | |||||||
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. | |||||||
[3] 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 1,210 in the average monthly instalment, but the increase in the average mortgage amount resulted in an increase of CZK 2,670.
Source. Note: Amounts are rounded to tens of crowns.
Statistical annex
Source.
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 website
Mortgage market in 2024: record growth of 83%
For the full year 2024, banks and building societies granted new mortgage loans in the volume of CZK 228 billion. This is a jump of more than 83% compared to the volume in 2023. In addition, mortgages were refinanced in the amount of CZK 47 billion, and the entire mortgage market thus grew to CZK 275 billion in 2024 from CZK 150 billion in 2023. If we adjust the volumes for the increase in property prices by 5-8% (according to various statistics), the volume of new mortgages grew in real terms by slightly less. 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.
Chart 2: Annual volume, number and average amount of mortgages granted between 2020 and 2024
Source.
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.