At the end of last month, due to the deterioration of Sberbank's CZ liquidity situation, the Czech National Bank decided to revoke its banking license. According to official statements, the situation was caused by a significant deposit withdrawal after the escalation of the Russian-Ukrainian conflict. The decision to revoke the banking license was...
From the point of view of the Czech mortgage market, the year 2021 was a record year, both in the number of provided mortgages and the total volume of provided funds. The main reasons were low interest rates, zero real estate transfer tax, simplified conditions for obtaining a loan and a change in customers' preferences.
The rise in interest rates does not end at the beginning of the new year either. Inflation in the Czech Republic is rising and the mortgage rates are rising with it. The largest Czech banks have increased the rates by 0.5% month-on-month.
In accordance with the newly acquired legislative power, the CNB may set mandatory limits for mortgage lenders. The changes concern DTI, DSTI and LTV will be mandatory from 1 April 2022.
While at the beginning of this year the average interest rate for mortgage loans was below 2%, now the rates are reaching almost 4% threshold. The Czech National Bank has raised basic interest rates several times already, which is also being reflected by banks in the level of mortgage interest rates. A higher interest rate means higher loan...
This is the highest increase done in a single meeting in the last quarter century. The reason for this significant intervention is strong inflationary pressure. In August, inflation in the Czech Republic reached 4.1 percent, while the aim is to return it to the 2 percent limit. According to the governor of the CNB, the reason for the...
The rules for calculating the penalty for early mortgage repayment are not yet uniform in the Czech banks. However, this situation is to be changed by new amendments to the Consumer Credit Act, which currently lie in the Chamber of Deputies Parliament of the Czech Republic. The aim of both proposals is to unify the rules for calculating...
The Bank Board of the Czech National Bank ("CNB") raised the basic interest rate for the second time this summer, which is now running at 0.75 percent. The level of the basic interest rate also affects the rate of mortgage loans. Mortgages will thus most likely become more expensive in the future.
At the beginning of the year, the average mortgage interest rate reached its minimum. The one-year gradual reduction of interest rates ended this spring and rates are starting to rise again. However, their growth is now hampered by competition between banks.
The amendment to the Act on the Czech National Bank ("CNB") was signed by the Czech president at the beginning of June. The CNB will thus acquire the statutory power to adjust the parameters for providing mortgage loans. Until now, the central bank could only issue recommendations which, despite their legal unenforceability, the banking...
