As many as 2,000 Czechs per month are taking advantage of low interest rates to refinance their mortgage loans. The trend is resulting in huge losses for banks, who are mostly helpless to stop the pain and prevent their clients from escaping to competing offers. One of the measures they are able to influence, however, is to shorten of the fixation period they offer going forward. This could prove to be tricky for consumers, as some experts warn that higher rates are coming. The chief analyst for the Czech Banking Association Vladimir Stanura says the increases from today’s 1.98 percent could be significant. “It could easily reach 5 percent,” he said. “So if a client agrees to a mortgage under the current conditions, he could be paying thousands more within a couple years.” Some banks tried to prevent their clients from leaving by charging them tens of thousands of crowns in extra charges, but the PR backlash proved to serious to make this a sustainable strategy.
