Number of new mortgages granted, excluding and including refinancing and loan increases

The CNB’s survey of banks’ lending conditions for the second quarter came as no surprise; the most significant change concerned housing loans. The central bank’s stricter criteria for investment mortgages tightened not only the banks’ lending requirements. In line with historical experience, this supported demand, likely temporarily. The impact on lending conditions was partially offset by lower bank margins and more favorable repayment terms. In an environment of continued strong competition, the stronger demand helped mitigate the impact of the spike in market interest rates on mortgage rates, which consequently rose more modestly. However, expectations of weaker demand for housing loans in the third quarter are changing this narrative. Surveys on consumer and business loans are also likely to keep the CNB’s outlook on the hawkish side.

The average interest rate on new mortgages rose to 4.79%, while the average mortgage amount fell back below 4.7 million crowns. Banks and building societies issued new mortgages (excluding refinancing) totaling 36.5 billion crowns. After months of exceptionally strong mortgage activity, June saw a clear return to the robust normal levels seen in the second half of last year. In the first half of the year, the volume of new mortgages reached 216 billion crowns, which is 66 billion more than last year. Higher market interest rates and expensive real estate remain the main obstacles.

In May 2026, banks and building societies actually issued new mortgages (excluding refinancing) totaling CZK 38.1 billion.

Average mortgage rate rises to 4.52%

This year is bringing a strong wave of expiring mortgage rate fixations, while the shorter fixation periods agreed in recent years will further increase these volumes in the years ahead. Building on the central bank’s latest estimate that mortgage fixations worth an average of CZK 534 billion per year will expire between 2026 and 2028, we present alternative interest-rate shock scenarios depending on the path of mortgage rates. In 2027–2028, the negative interest-rate shock is expected to ease to 0.1–0.6 percentage points, down from 1.1–1.4 percentage points this year. However, we also outline a more adverse scenario involving a stronger interest-rate shock. This year, the negative interest-rate shock affecting expiring mortgage fixations from the low-rate period will amount to roughly 3.5% of the average household income of mortgage applicants, although across all households the average impact will be about half that level. In both cases, the expected real growth in wages and salaries should be sufficient to offset the shock.

The average amount of a new mortgage exceeded CZK 4.8 million

February ranked among the five strongest mortgage months ever in terms of volume in billions of crowns, but also with a continued strong number of new mortgage originations.

Comment by Jaromír Šindel, Chief Economist of the CBA: The Central Bank, through stricter requirements in the form of recommendations for investment mortgages, has decided to make a modest effort to correct mortgage demand on the real estate market, which remains very tight in terms of prices, mainly due to the supply side - see the drop in building permits.

Despite the slight correction, April continued to see strong volumes of new mortgages supported by another slight decline in the average mortgage rate to 4.65%.

March continued to see strong new mortgage volumes supported by another slight fall in the average rate to 4.68%