The Czech mortgage market continues to break records, with banks handing out a total of CZK 22.05 billion in September. The main driver of the surge in borrowing are the low interest rates which have fallen to nearly 2 percent. The Fincentrum Hypoindex index fell another 4 basis points, just as it did in August, reaching 2.07 percnet. That’s a .37 percent drop in interest rates over the past six months and a full percentage point lower than it was in February 2019. Product manager at Fincentrum and Swiss Life Select said “in view of the steps of some banks, we can expect further rate reductions,” adding that rates were now at the same level as they were in September 2017. In August, banks handed out 6,868 mortgages worth CZK 19.173 billion but in September, they provided 1,000 more loans. If the trend holds, 2020 could somehow end up setting a record in terms of the total volume of mortgages, as the average agreement has grown CZK 441,000 to CZK 2.8 million.
