Number of new mortgages granted without and with refinancing and increases

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%