If observers of the Czech residential market expected the coronavirus pandemic to have as dramatic an effect on demand for mortgages, they’ll have been surprised by the latest figures from Fincentrum Hypoindex. In fact, the company’s index has never recorded such a strong April as it did in the midst of the lock down, with 6,744 mortgages worth CZK 17.8bn concluded. That was 349 loans more than in April 2019, while the volume was CZK 3.2bn larger. Interest rates for the loans fell 5 bps to 2.39 percent, despite the fact that the Czech National Bank raised its base rates twice during the first quarter of 2020. The rise in loans was also unexpected because banks are being even more careful now about who they lend money to and under which conditions. “Banks are limiting certain types of income that they’ll accept when calculating the bonity of the applicant,” said Jiří Sýkora. “Anyone who works in tourism or the restaurant business can say goodbye to a mortgage.”
