“Banks do not have to reduce interest rates. Interest swaps (the price of money on the interbank market – editor’s note) Since the end of August, they climb up again and are at a higher value than they were a year ago. Another reason is the relatively large restlessness and chaos on the world markets and on the world political scene. Last but not least, the demand for mortgages is large, so banks do not have much reason to push the rates down, ”Lucie Drásalová summed up for the news.
She added that the Czech National Bank will continue to keep interest rates at bay. The basic rate is 3.5 percent and no significant movement down is expected now.
Also, Swiss Life Select analysts warn that banks protect margins and no big break in mortgage prices will not come. They claim that those who will use the expected autumn discounts in banks and will not wait for better times, but they do not seem to come.
Compared to August, the average mortgage rate decreased by six hundredths. Hypoindex methodology reflects the current average offer rate of mortgage loan for 80 percent of the value of the property. They still become more expensive, which is reflected in the amount of mortgages and their installments. At the same time, fewer people can afford them.
The monthly mortgage repayment to CZK 3.5 million agreed up to 80 percent of the estimated price of a real estate with a maturity of 25 years at an average offer rate of 4.99 percent per year was CZK 20,450 in September.
According to experts, it is worth reading the offer from more banks according to experts. “The standard is increasingly considered to fix the interest rate for three or five years, which combines stability with a certain flexibility. On the other hand, mortgages with very short or long fixation remain mostly less advantageous,” said Jiří Sýkora, analyst.
Worries about refixations
Three -year fixations also recommend people who end the fixation period. “We assume that rates will rather fall in the coming years, even very slowly,” he said.
Clients who have arranged a mortgage with an interest rate of about two percent during Covid, because today they face considerably higher installments when the fixation is changed.
“If someone at that time took a five -million loan for 30 years with a five -year fixation, their monthly installments amounted to about 18 500 crowns. If it lasted five -year fixation today, the offer rates start at 4.59 percent.
In the case of a three -year fixation for the same loan, the monthly installment would be about 24 700 crowns – it would be 6200 crowns larger than before.
According to Sýkora, clients should start solving the end of their fixation at least three months before its expiry. “As a first step, I recommend negotiating with my existing bank. Only with a new offer in hand makes sense to bypass the competition,” advises the analyst.
