Mortgage rates that were faltering at historical lows last year seem to have bottomed out after dropping to 1.77 percent in November. In December, large banks announced plans to increase rates following a new law on consumer lending and increased currency values on the interbank markets. Mortgage rates, however increased only slightly. Česká spořitelna planned to increase rates in January but delayed the hike by two weeks. Komerční banka increased rates by 0.5 percent in November. Hypoteční banka upped rates by 0.3 percent at seven- and 10-year fixations. Raiffeisenbank, Sberbank and UniCreditBank followed suit. This should not discourage people from buying new flats, writes Central Group in a statement. The developer’s head, Dušan Kunovský, warns, however, that a new regulation by the Czech National Bank, forbidding 100-percent mortgages and reducing the number of 80- to 90-percent mortgages to just 15 percent of the total, might inhibit young families from buying a flat as they will unlikely be able to put together a 20-percent down-payment, which is something around CZK 1m.
