Mortgages picked up in June

After a drop in May, the market seems back on track

Mortgage numbers rose in June after a slump in May and reached the highest volume so far this year. The average interest rate decreased by two-hundredths of a percentage point, reaching 2.49 percent, according to the Fincentrum Hypoindex.

Mortgage banks saw 1,211 more clients in June than in May. In total, 9,030 mortgage contracts were concluded in June. Volume climbed to Kč 19.380 billion, some Kč 2.613 billion more than in May.

The volume in crowns was the highest in June so far this year, but March had the most mortgages, with a total of 9,087.

“The ongoing spring offers have gradually turned to summer and led to a slight decline in average interest rates in June in the Fincentrum Hypoindex. Although the ČNB increased its key interest rates at the end of June, it does not seem that banks have entered the race to raise rates in response to this move,” Fincentrum chief analyst Josef Rajdl said in a press release.

He added that banks are likely to use mortgages to attract new clients before the rules for lending are tightened to follow recommendations for the Czech National Bank (ČNB) in October.

Interest rates this year were lowest in January, at 2.28 percent, and rose until April. They stayed the same in May. The drop in June was the first decline of the year and put the rate back to just above the March level, which was 2.46 percent.

In total in the first six months, there were 49,061 mortgages with a volume of Kč 104.72 billion.

These results are down compared to the first half of last year, which saw 58,711 mortgage clients and a volume of Kč 118.553 billion. Experts do not expect this year to set a record for either numbers or volume of mortgages due in part to further expected interest rate rises from the ČNB.

The Fincentrum Hypoindex evaluates the development of mortgage prices over time. It is the weighted average interest rate for which new mortgage loans for individuals are provided in a given calendar month.

Input data for calculations are provided by the following banks: Air Bank, Česká spořitelna, ČSOB, Equa Bank, Moneta Money Bank, Hypoteční banka, Komerční banka, Raiffeisenbank, Sberbank CZ, UniCredit Bank and Wüstenrot Mortgage Bank. 

Looking for a mortgage? Check the offer from our partner Sim Property.

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