Mortgage prices have stopped rising, but no significant drop in rates is expected

According to Fincentrum Hypoindex, the average offer rate for mortgages fell slightly for the second time in a row. The Czech National Bank (ČNB) left base interest rates unchanged at its September meeting, while some banks cut mortgage rates as part of their autumn discount promotions. According to experts, however, a significant fall in rates cannot be expected shortly, and there may even be a rise.

The average mortgage offer rate was 6.20 percent at the beginning of October. It fell by 0.08 percentage points compared to August and by 0.03 percentage points compared to the previous month. However, according to mortgage experts, a change in the trend is not yet possible.

Mortgages above 80 percent of the collateral value, intended for young clients up to 36 years old, with a 10-year interest rate fixation, have become the cheapest.

The drop was 0.08 percentage points, and they are now offered at an average of 6.29 percent. Mortgages with a three-year fixation became cheaper by 0.04 percentage points, to 6.7 percent and 6.24 percent per annum, respectively. For one-year fixings, the decline was 0.03 percentage points to 6.24 percent.

Rates below the six percent threshold can be obtained from some banks for mortgages up to 80 percent of the value of the collateral.

Banks offer mortgages up to 80 percent LTV with one-year fixings at an average of 6.49 percent per annum (down three basis points month-on-month), while those with three-year fixings are offered at an average of 6.4 percent per annum (down one basis point month-on-month).

The further development of mortgage rates will depend mainly on the ČNB’s stance on base interest rates. At its September meeting, it left them unchanged, but two of its seven board members voted for three-quarters of a percentage point increase.