The average mortgage rate in the Czech Republic decreased slightly at the beginning of April to 5.01%, down 0.04 percentage points from the previous month. This is the lowest level recorded since the spring of 2022, according to the Swiss Life Hypoindex, which tracks the average offer rates on mortgage loans covering 80% of a property’s value. While discussions have emerged about the potential start of a mortgage rate increase, most banks have not yet taken such steps. Some institutions have slightly reduced their rates. Three-year fixed-rate mortgages are currently the most competitively priced, with rates ranging between 3.99% and 4.99%. According to Jiří Sýkora, an analyst at Swiss Life Select, the current developments support expectations of a gradual and modest decline in rates. The market is seeing greater variation in offers across banks. The spread between the lowest and highest offers can reach up to one percentage point, leading to differences of several thousand crowns in monthly repayments. The number and total value of mortgages issued so far this year is almost double that of the same period last year. Sýkora expects this positive trend to continue, helped by the slow but ongoing decrease in interest rates. However, not all types of mortgage fixations are seeing rate cuts. While some banks have raised rates for one-year fixations, others have held or increased rates for five-year or longer fixations. Most institutions continue to favour two- to three-year fixed-rate options. Daniel Horňák, an analyst from Bidli, expressed skepticism about the idea of rising mortgage rates, pointing to the current competition among banks. He noted that market conditions are more likely to support rate reductions and described warnings of rising rates as unfounded and disruptive. Tom Kadeřábek, head of product at Swiss Life Select, noted that recent developments in the global economy, including uncertainty related to U.S. policy under President Donald Trump, may encourage banks to keep rates stable in the short term. Until the direction of inflation and broader economic trends becomes clearer, major changes are unlikely. Tomáš Jelínek, director of the real estate agency Century 21, also does not expect a significant decline in rates. He cited ongoing uncertainty in global markets, particularly due to instability in U.S. governance and the war in Ukraine. According to him, the recent market growth is largely due to previously postponed demand, although he believes the full potential of the market is still untapped. He added that despite the high cost of living, relatively low incomes continue to place pressure on affordability in the Czech housing market. Source: CTK