Central Group: Tighter mortgage conditions will affect almost 60 percent of applicants

For the whole of 2021, the Czechs borrowed a record CZK 427 billion from banks for housing, the huge interest in mortgages was not a surprise. The conditions have been the most favorable in recent years and the purchase of real estate is one of the most rational steps in times of uncertainty. It was - and still is - one of the best ways to protect money from rapidly rising inflation. It is now almost 7% and according to estimates it can grow up to 10%. At the same time, banks usually offer a maximum of a weak 3% in savings accounts.

However, the new CNB regulations will make it more difficult for many people to make their own homes as early as 1 April. For example: while now it was enough to save CZK 500,000 from your own resources to buy an apartment worth CZK 5 million, from April 2022 you will need at least CZK 1 million. In addition, it will be possible to take out a loan only up to 8.5 times the net annual income. According to the statistical office, a person with an average Prague income of CZK 45,000 (36,000 net) will thus reach a maximum of CZK 3.7 million on a mortgage. In addition, the total repayment of all loans may not exceed 45% of net monthly income.

Only people under the age of 36 can be exempted. According to internal statistics from Central Group, last year, people under the age of 36 made up 42% of all apartment loan applicants. The remaining 58% of clients would not be able to benefit from the new conditions. Stricter conditions are likely to fall on two-thirds of all loan buyers. In addition, mortgage interest rates will continue to rise, this year they could attack 6%. Anyone who wants to buy their own housing should not postpone their decision. He still has time to take advantage of the current more favorable conditions by the end of March.

Author: Central Group