Mortgages are slowly getting cheaper, rates are still above five percent

“In the first months of this year, I expect a reduction in rates in the range of a few tenths of a percent, which will be associated with the traditional spring start of the mortgage market. However, with regard to persistent inflationary pressures in the economy, only a very gradual rate reduction can be expected for the rest of the year,” says Swiss Life Select analyst Jiří Sýkora.

According to him, at the end of the year, the mortgages of the largest banks – Česká spořitelna, ČSOB and Komerční banka – became cheaper. “Similarly as some smaller competing banks have done before,” he pointed out. For example, Komerční banka started offering mortgages with a rate starting at 4.79 percent per year for two- and three-year fixations before Christmas.

However, current pro-inflationary pressures generally do not record a drop in rates. “The accession of Donald Trump to the head of the USA and his customs policy, but also geopolitical risks are factors that will keep the market and the Czech National Bank in tension. Therefore, the central bank will probably not engage in further easing of monetary policy. All this will have an effect on long-term rates, which determine mortgage prices,” said Tom Kadeřábek from Swiss Life Select.

According to him, it would help if a large bank came up with a more aggressive pricing policy. “However, the question is whether this is realistic, because banks are satisfied with the current situation and higher margins. We will have to wait for rates starting with three,” he added.