CBA Hypomonitor: August defended the second strongest activity despite the correction
The rate fell slightly to 4.52%.
Prague, 15 September 2025 - In August 2025, banks and building societies granted new mortgages worth almost CZK 26 billion. Compared to a record July, activity has weakened by 13% in volume terms, but remains at stronger levels than in the second quarter. And on a seasonally adjusted basis, it holds the second strongest position, both in volume and number of new mortgages. Year-to-date, new mortgage originations have reached CZK 206 billion, up CZK 60 billion from a year ago. The average realised mortgage rate fell slightly further to 4.52%. Its year-on-year decline of 0.46% points reduces monthly repayments by approximately more than CZK 1.1 thousand. This represents 1.2% of the mortgage applicant's net income. The size of the newly granted mortgage fell slightly to CZK 4.26 million in August, following an almost year-long upward trend. Its year-on-year growth thus eased to 314k, slightly mitigating the impact on the higher average monthly repayment to almost 1.7k. This is approximately 1.8% of the applicant's income. The above information is derived from the CBA Hypomonitor data, which captures data from all domestic banks and building societies providing mortgage loans.
If mortgages maintain the momentum of the previous four months, with the exception of an extra strong July, the volume of new mortgages without refinancing could reach CZK 301 billion in 2025, almost a third more than last year. This is accompanied by a better estimate of the number of new mortgages this year at 74.6k, above the average annualised estimate of the previous three months (72k).
The new figures do not bring a significant change in the trend. Thus, the mortgage numbers are likely to continue to pose an upside risk to inflation with implications for the CNB's interest rate policy (2-week repo at 3.5%) and are also likely to perpetuate the non-trivial debate over the setting of macroprudential policy, the next decision of which is scheduled for 27 November.
Table 1: Summary of mortgage origination volumes and average interest rates for August 2025 and for the year to date
monthly values | year-to-date values | ||||||
Volume | Number | Rate | Volume | Number | Rate | ||
Total | 33,1 | 8 071 | 4,52 | 255,4 | 63 989 | 4,61 | |
New loans | 25,9 | 6 086 | 4,52 | 205,6 | 49 737 | 4,62 | |
of which: | |||||||
for purchase | 20,9 | 4 784 | 4,52 | 164,2 | 38 942 | 4,61 | |
for construction | 3,6 | 890 | 4,49 | 31,4 | 7 797 | 4,58 | |
Other | 1,4 | 412 | 4,73 | 10,0 | 2 998 | 4,82 | |
Refinanced from another institution | 6,1 | 1 677 | 4,50 | 40,5 | 11 710 | 4,57 | |
Refinanced internally, increased | 1,1 | 308 | 4,51 | 9,3 | 2 542 | 4,57 | |
Source. | |||||||
August surprised with a strong volume of new mortgages despite a correction after a very strong July
In August, banks and building societies actually granted new mortgage loans worth CZK 25.9 billion, and in addition, clients refinanced or increased their mortgages to the extent of CZK 7.2 billion. Compared to July, new mortgage activity thus fell by around 14% in volume terms, which partly corresponds to a seasonal effect, but it is mainly a correction after a strong July with 30 billion new mortgages granted. After seasonal adjustment, August's new mortgage numbers brought a slight decline to CZK 25.9 billion. Although this is down 11% on July's 29.3bn, it is the second strongest month this year. The volume of new mortgage originations in August was approximately 57% higher than in the first half of last year. In year-on-year terms, the growth in the volume of mortgage originations in August slowed to 1% from 53% in July, following an 83% year-on-year increase last year, reflecting the strong front-loading of mortgages in August last year due to the amendment of the law regulating early repayment terms.
"Unlike in previous years, the market did not fall during the holiday months, on the contrary, it continues to grow. The share of refinanced mortgages is also increasing, which corresponds to the current refinancing potential in the market," adds Marek Richter, Head of Mortgage Services at Air Bank.
The number of new mortgages is also holding high despite the August correction and is on track to surpass 2019 levels this year. The number of new mortgages fell 13% month-on-month in August to 6,086 units, down 6% from a year ago. We estimate the seasonally adjusted number to be around 6,178. Although a smaller number than the nearly 7,000 recorded in July, August's count shared second to third place with March for the year. Year-to-date, the number of new mortgages has reached 49.7k (+25.5% y/y). Excluding a strong July, the momentum in the number of new mortgages over the past four months implies a rise to a total of around 74.6k this year, which would be almost 21% higher than last year and close to the 72k of 2019.
"Despite the correction, August activity remained the second strongest this year, both in number and volume. Thus, the threshold of three hundred billion crowns of newly granted mortgages is approaching for this year," believes Jaromír Šindel, chief economist of the Czech Banking Association.
Chart 1: New mortgages granted without refinancing
InAugust 2025, banks and building societies granted new mortgages worth CZK 25.9 billion, which remains a very strong figure despite the correction after a stronger July.
Source: CNB, CBA Hypomonitor (pre-2020 volumes are from CNB statistics)
The higher ratio of refinanced loans is in line with the current trend and is likely to increase. The volume of refinanced and increased loans (internally or from another institution) fell to CZK 7.2 billion in August. Even so, this is 84% higher than the average 3.9 billion refinanced last year and more than double the 2.2 billion refinanced in 2023. The share of refinanced loans in total mortgage originations then rose to nearly 22%, above last year's average of 17%. While it is also above the 17.2% share from 2022-2023, it is still below the nearly 29% share from 2020-2021, when households refinanced at a mortgage rate of 2.14%. In August 2025, households refinanced at a rate of 4.5%, but that is still a significant 0.41% point lower than the 4.91% rate a year ago.
Overall, banks and building societies granted new and refinanced mortgages worth CZK 33.1 billion in August, 12.3% less than a month earlier. Their total volume so far this year has reached CZK 255 billion, which represents a 46% increase compared to January-August of the previous year.
The average mortgage rate slowed its downward trend significantly in August to 4.52%
The average realised interest rate on new mortgages fell slightly further in August to 4.52% from 4.53% in July. Its reduction thus confirms a downward trend below the 5% last seen in July 2024. Its August level is thus 0.46% points lower than the 4.98% rate a year ago, which reduces 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.
"Temporary slight cheapening could be brought by limited-time promotional offers of some banks, however, given the development of interest rate swap prices, we cannot expect a significant drop in mortgage rates in the coming months," says Ondřej Šuchman, mortgage manager at Komerční banka.
Chart 2: Average mortgage rate - new business
The August mortgage rate fell only slightly to 4.52%, with a year-on-year decline of less than half a percentage point.
Source: CNB, CBA Hypomonitor
Market interest rates, [1] which have a key influence on mortgage rates, stabilised at higher levels in August, which is likely to limit further significant declines in mortgage rates in the future. Czech five-year interest rate swaps rose marginally further in August by 0.03% points to 3.72% and are thus almost 0.2% points above June's 3.54% and more than 0.4% points above their April level. Over the past twelve months, Czech five-year swaps have ranged between monthly averages of 3.19% (September 2024) and 3.72% (August 2025). Compared to the average level of five-year swaps in 2024, August rates were 0.14% points higher. In the case of US five-year interest rate swaps, they fell to 3.7% in August from 3.83% in July due to worse labour market data and were 0.42% points below their 2024 average. In contrast, euro five-year swaps rose to 2.33% in August from 2.3% in July, also due to expectations of an unchanged ECB interest rate at its September meeting, and were 0.25% points below their average level of 2.58% last year.
Domestic factors that influenced the interest rate swaps were mainly: i) the CNB's 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 outlook on the economy; ii) higher core inflation in June contributed to this, while its July as well as August readings may bring some relief; iii) stronger growth in the Czech economy in Q2, coupled with stronger inflationary wage growth (see comment here); iv) 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 interest rate on new mortgages fell slightly to 4.52% in August and was thus around 0.94% points above average market swap rates. This is approximately 0.14% points below the long-term average since 2014 (1.08% points), while in the previous three months this spread to the long-term average was 0.07% 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 gap between mortgage and market rates is likely to limit further significant declines in mortgage rates.
[1G These are mainly long-term interest rate swaps (IRS), which reflect the price of money at longer maturities, for example 2 to 10 years.
Market long-term rates stabilised at higher levels in August compared to the first half of the year
Source: LSEG (10th september, 2025), CBA
The average mortgage size fell slightly to CZK 4.26m in August. CZK and stabilization was also evident for mortgages for purchase
The average size of a new mortgage actually granted in August fell slightly to CZK 4.26 million.CZK compared with July. However, its size is still 8% higher than the EUR 3.95 million in the same period of 2005. CZK a year ago. Taking into account the extraordinary value of almost CZK 4 million, the mortgage volume is still higher than the previous year. CZK in August 2024 (effect of new legislation), the average value has been rising steadily since last April and is 23% above the previous record level of CZK 3.46 million in November 2021. CZK. A gradual decline in mortgage rates, or slightly stronger growth in real household incomes (3.9% y/y in Q2-2025 or charted here), 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. The rising mortgage amounts are then also linked to the evolution of house prices, which, according to Flat Zone data, maintained a still strong 10% year-on-year growth in Q2 2025 (see charts on the CBA Monitor - CBA Monitor or in the commentary here). The CSO data points to house price growth of around 15% y/y and an overall house price index of around 10% y/y in Q1 2015 (see commentary here)
Chart 3: Average amount of new mortgages actually granted by purpose
The average mortgage amount has stopped its upward trend after almost a year, with a slightly lower level in August at CZK 4.26 million, or CZK 4.37 million in the case of a mortgage for the purchase of real estate.
Source: CNB, CBA Hypomonitor
Impact on the average monthly mortgage payment of almost CZK 23,000
The combination of the fall in interest rates and the higher average mortgage amount in August 2025 compared to the 2024 averages increased the average monthly mortgage payment by CZK 2k. 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 0.6% points relative to their average rate of 5.07% in 2024 would, for an average mortgage size with a typical repayment term of around 26.8 years, reduce the monthly repayment by just under CZK 1 400 to around CZK 22 900. This is a reduction of CZK 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 3.2k. 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 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: | 4 262 440 | ||||||
Average interest rate in %: | 2,0 | 3,0 | 4,0 | 4,52 | 5,0 | 6,0 | |
Monthly instalment: | |||||||
Mortgage maturity in years: | 15 | 27 430 | 29 440 | 31 530 | 32 660 | 33 710 | 35 970 |
20 | 21 560 | 23 640 | 25 830 | 27 020 | 28 130 | 30 540 | |
25 | 18 070 | 20 210 | 22 500 | 23 750 | 24 920 | 27 460 | |
26,8 | 17 150 | 19 320 | 21 640 | 22 910 | 24 100 | 26 690 | |
30 | 15 750 | 17 970 | 20 350 | 21 660 | 22 880 | 25 560 | |
Source: CBA [1] | |||||||
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. | |||||||
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 ayear-on-year comparison, the fall 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 1 690.
The table is available in the xls file attached on the CBA Hypomonitor website
Source. 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.