In July of this year, banks and building societies granted mortgage loans totaling CZK 23.8 billion, with CZK 19.6 billion being new loans. Despite a slight decline in mortgage activity compared to June, which can be attributed to seasonal factors, the level of newly granted loans remains robust, surpassing the figures from 2020.
The average interest rate for new mortgage loans rose slightly for the first time this year, increasing from 5.05% to 5.07%. This small uptick marks the first rise in the average interest rate since May of the previous year. Additionally, the average mortgage amount continued to climb, reaching CZK 3.77 million in July, according to the latest data from CBA-Hypomonitor.
“The mortgage market is being influenced by more favorable interest rates compared to last year, postponed demand, and a renewed increase in property prices,” says Martin Vašek, CEO of ČSOB Hypoteční banka.
Despite a 6.5% decline in lending volume compared to the previous month, the continued high level of mortgages granted confirms the ongoing recovery of the market. A total of 5,204 new mortgages were granted in July, which is above the annual average. The number of refinanced loans remained stable at CZK 4 billion, accounting for 17.4% of the total volume.
Interest in mortgages to finance low-energy projects is also on the rise, particularly among young people under the age of 36. At current interest rates, a mortgage of CZK 1 million with a term of 30 years costs around CZK 5,500 per month.
