The decline in Czech Mortgage Market in April with Slight Rise in Interest Rates

The mortgage market in the Czech Republic experienced a decline in April, as the volume of mortgage loans provided decreased by 16 percent compared to the previous month. This decline amounted to two billion Czech crowns, resulting in 10.6 billion Czech crowns in April. Additionally, the average mortgage interest rate witnessed a slight increase of three basis points, reaching 5.89 percent annually.

After a particularly successful month in March, where banks and building societies granted mortgage loans amounting to 12.6 billion Czech crowns, representing a 60 percent increase compared to the previous month, April’s performance was less remarkable—according to the latest data from ČBA Hypomonitor, the volume of agreed mortgage loans reached 10.6 billion Czech crowns.

Regarding newly granted mortgages without refinancing, April saw 1.5 billion Czech crowns decrease, with the volume amounting to 8.8 billion Czech crowns. The importance of refinanced loans, internally or from other institutions, reached 1.8 billion Czech crowns, a decline of 0.5 billion Czech crowns compared to March.

Alongside the decline in volume, the total number of agreed mortgages in April also decreased by 814, with 3,691 mortgage agreements concluded. The number of newly granted mortgages dropped to 2.9 thousand, compared to nearly 3.5 thousand in March.

Despite the decline, experts suggest that the April figures should be interpreted in the context of historical trends, as April tends to be weaker than March. Although the mortgage market has shown signs of recovery in recent months compared to the second half of the previous year, monthly volumes of granted mortgages remain significantly lower, approximately half, compared to the period just before the pandemic.