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Mortgage rates rising
The recent ČNB rate increase is getting passed on to clients
Banks have responded to the Czech National Bank's (ČNB) recent increase in the basic interest rates.
Česká spořitelna on Nov. 6, raised mortgage rates, with Komerční
The ČNB bank board on Nov. 3 increased the two-week repo rate by 25 basis points to 0.50 percent. At the same time, it increased the Lombard rate by 50 basis points to 1 percent and kept the discount rate unchanged at 0.05 percent. It was the second repo rate increase this year.
The era when it was possible to get the rate under 2 percent in the Czech Republic is at an end, analysts say.
Hypoteční
Komerční
The minimum rate for the most popular, five-year fixation is just under 2.5 percent in major banks. This is the rate at that favored clients
Michal Pich, managing director of
Banks are reluctant to raise rates too high as they are afraid they might lose market share.
Komerční
Last fall, Komerční
Some bankers according to HN say that in 2012 the basic ČNB rate was also 0.5 percent and mortgage rate was 3 percent. At that time banks did not compete as strongly as they do at present.
Analysts also point out the cost of mortgages will continue to rise as banks will seek to compensate for losses incurred over the last year when rates were low. The increase in the ČNB rate makes it easier for banks to justify passing the costs onto clients.
The ČNB is likely to continue raising rates, and many clients will want to speed up getting a mortgage before rates rise, even more, analysts say.
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