Equa bank became the first to drop its mortgage rate by 0.6 percent in response to the Czech National Bank’s (CNB) rate reductions. It hopes the move will rekindle interest in mortgage loans at a time when the residential market has come to a virtual standstill thanks to the pandemic. Equa is now offering mortgages for just 2.29 percent. “In view of the current situation we expect that people will concentrate on improvements to their cottages and cabins,” said Equa’s director of retail banking Ondřej Hajek. “That’s why I believe that clients could appreciate lower interest rates on mortgage loans.” But the country’s other banks don’t appear interested in following Equa down the interest rate rabbit hole. Česká spořitelna said that demand for mortgages had fallen 70 percent and that it was concentrating on applications for state-guaranteed low-interest loans for non-Prague companies.
