The average mortgage rate in early January fell to 5.13%, marking a 0.09 percentage point decrease compared to the previous month and the lowest level since spring 2022. This data, derived from the Swiss Life Hypoindex, reflects average offer rates for mortgage loans covering up to 80% of a property’s value. The decline is attributed primarily to rate cuts by the three largest banks—Česká spořitelna, ČSOB, and Komerční banka—following similar actions by smaller competitors late last year. Experts predict mortgage rates will continue to decline modestly throughout 2025. “While rates are likely to fall further, inflation remains a limiting factor preventing a sharp drop,” explained Tom Kadaařábek, head of Swiss Life Select’s product department. As of January, the monthly payment on a 25-year mortgage for CZK 3.5 million at 5.13% interest amounts to CZK 20,730—approximately 1,000 crowns less than the previous year. Banks are preparing for the annual spring uptick in mortgage activity, suggesting further slight rate reductions in the coming months. However, the Czech National Bank’s recent decision to maintain its current base rate indicates no dramatic shifts in mortgage rates. According to Jiří Sýkora, a mortgage analyst at Swiss Life Select, this gradual downward trend may persist throughout 2025, with rates potentially approaching the 4% threshold. Source: CTK