If trends in the mortgage market continue as they are, the average offer rate may fall below five per cent in April for the first time in three years, according to the Swiss Life Mortgage Index. In March, the index closed at 5.05 per cent.
“In March, the Swiss Life Hypoindex reached 5.05%—another slight decline, confirming forecasts of a gradual fall in mortgage rates. The decrease in the average mortgage interest rate is, of course, due to falling interest rates at individual banks. The gap between different offers is widening in an interesting way, both between banks and across different fixings. The lowest interest rates are currently being offered for a three-year fixed rate, which has become the preferred choice among negotiated mortgage options,” says Jiří Sýkora, mortgage analyst at Swiss Life Select.
According to the Swiss Life Hypoindex, the three-year fixing has remained below five per cent for the fourth consecutive month. The five-year fixing fell below this level for the first time in March. However, the changes across fixings remain minimal—the monthly decline in interest rates is in the range of mere hundredths of a percentage point and is therefore barely significant.
The expected trend in mortgage rates is clear: interest rates are gradually falling. However, this decline will continue to be slow and incremental.
“In February and early March, we also saw how unpredictable Donald Trump’s policies were—and, more importantly, will continue to be. This uncertainty not only impacts the macroeconomic environment and financial markets but also influences central banks’ decisions on key interest rates. The threat of tariff wars and the associated expectations of higher inflation are prompting both the market and the Czech National Bank to adopt a cautious stance on further interest rate cuts,” adds Tom Kadeřábek, Head of the Product Department at Swiss Life Select.
The monthly repayment on a CZK 3.5 million mortgage loan—covering up to 80% of the estimated property value (LTV), with a term of 25 years and an average offer rate of 5.05% p.a.—stood at CZK 20,555 in March. Taking out a mortgage now would save CZK 2,800 per month compared to two years ago. In February 2023, the monthly instalment for this model example was CZK 23,340, with an offer rate of 6.37%.
