Interest rates on mortgages offered by domestic banks remained below five percent for only two months—May and June. Since the beginning of summer holidays, housing loans have been gradually increasing in price. According to the Swiss Life Hypoindex indicator, the average rate rose by another two basis points to 5.05 percent in August.
“Mortgage rates at some banks increased slightly again during July, confirming the mild upward trend from previous months. The average rate for newly negotiated mortgage loans has risen from 5.03 percent at the beginning of July,” confirmed Jiří Sýkora, an analyst at Swiss Life Select. This means the monthly payment for a typical mortgage of 3.5 million crowns, arranged up to 80 percent of the property’s estimated value (LTV) with a 25-year maturity at the average offered rate, currently amounts to 20,571 crowns.
However, individual bank offers vary significantly. “For example, in August it’s still possible to find rates starting from 4.14 percent for mortgages with five-year fixation. But these offers change quickly, and clients who want to take advantage of such individual promotions must act promptly and be prepared. Banks also assess clients’ risk profiles differently, which further deepens differences in their offers,” Sýkora added.
Lucie Drásalová, a mortgage analyst at Sirius Finance, told Novinky that several major banks have recently increased their rates for end clients or canceled various marketing promotions that affected the final rate. “This meant clients really encountered higher rates during July than in June, for example. But mortgages are still realistically available at under 4.5 percent per year without requiring loan insurance,” she confirmed.
By the end of the year, the analyst expects only very cautious and gradual reduction of the average mortgage rate to around 4.5 percent. “There is room for rate reduction, but banks are reluctant to lower them. Demand remains relatively high. We certainly won’t see any major changes during the holidays, and unfortunately, this will likely remain true for the rest of the year,” she concluded.