Last year’s predictions of cheaper mortgages for Czech citizens have proven wrong. Despite the Czech National Bank (CNB) halving its base rate over the past 18 months, mortgage rates haven’t even dropped by 20%. Consumer loans are actually becoming more expensive, while savings account interest rates continue to decline.
The disconnect between central bank policy and retail lending rates is stark. While the CNB’s base rate has fallen to 3.5%, average mortgage rates remain stubbornly high at 5%. For perspective, on a 4-million-crown mortgage over 26 years, this two-percentage-point difference costs borrowers an extra 4,000 crowns monthly.
Banks are enjoying robust profits from this situation. Their combined net profit increased by 18 billion to 121.7 billion crowns last year. The trend continues in 2025, with the six largest banks reporting a 13% year-over-year increase in first-quarter profits to 20.2 billion crowns.
Market experts point to several factors keeping rates high, including strong loan demand, global uncertainties, and rising government bond yields. Commercial banks must also secure financing for the entire fixed-rate period of their mortgages.
For consumers, there’s still room for negotiation. Some banks are willing to reduce mortgage rates by up to 0.7 percentage points from their initial offer. Financial advisors recommend carefully comparing different banks’ offers and being prepared to negotiate.