Bank discount promotions have ended, and after two months of decline, the average mortgage offer rate has increased again, according to Fincentrum Hypoindex. It reached 6.31 percent, 11 basis points higher than last month. However, there is no sign that mortgages will become significantly more expensive again.
“The increase in the average mortgage offer rate and the decreases in the past two months are due to promotional discounts. This is because they ended before the weaker winter season. However, these minor fluctuations are part of the normal functioning of the mortgage market and confirm our predictions of a period of stable interest rates, which should last until the beginning of next year,” said Jiří Sýkora, mortgage analyst at Fincentrum & Swiss Life Select.
In one year, the monthly payment has increased by six thousand
A mortgage of CZK 3.5 million, up to 80 percent of the estimated property price, with a 25-year maturity and a three-year fixation, will cost a client CZK 23,228 a month at the average rate in November. The repayment increased by CZK 237 compared to the previous month.
“Compared to the increases in the last year, however, this is not a dramatic increase in the installment. The biggest month-on-month increase in the last year occurred in July, when the monthly installment rose by almost CZK 1,150. Over the past year, the monthly installment has already increased by almost CZK 6,000,” Sýkora added.
Mortgages with a one-year fixation became the most expensive
Mortgages up to 80 percent of the estimated property price became the most costly in the case of fixed interest rates for one year, increasing by 0.19 percentage points to an average speed of 6.68 percent. For mortgages above 80 percent of the value of the mortgage, the one-year fixation averaged 6.4 percent, 0.16 percentage points higher than in October.
Also, the average offer rate for mortgages up to 80 percent LTV with five- and ten-year fixings was above the six percent mark. It rose by 0.12 percentage points to 6.07 percent per annum for the five-year fixation and by six basis points to 6.05 percent per annum for the ten-year focus. There was also a 0.06 percentage point increase in the average rate for mortgages with a three-year fixation, which were offered at 6.46 percent per annum as of November 7.
According to Fincentrum Hypoindex data, mortgages above 80 percent of the appraised value of the property with a three-year and 10-year fixation of the interest rate rose by the same four basis points to 6.74 percent and 6.33 percent per annum, respectively. The average offer rate for mortgages with an LTV of more than 80% with a five-year fix increased by 0.1 percentage point to 6.34 percent per year.