In 2017, 31 percent of the mortgages signed between January and July had fixed rates of five years or more. The figure grew to 41 percent in 2018 but with interest rates falling even further this year, nearly half of all mortgages had the rates locked in for the long-term. Hospodářské noviny spoke with David Eima from Gepard Finance says it’s not just the lower rates, but the shrinking discount banks are offering for shorter rates. “A couple of years ago, the difference between a five year and a ten year fix was significant,” he said. Komerční banka, he pointed out, offered 10-year fixed-rate loans for 0.7 percent more than the 5-year variety (2.79 percent for five years, 3.49 percent for 10). Today, the bank is offering 2.79 percent for both variants. In fact, Czech National Bank data suggests that long-term fixed-rate loans are being offered at slightly lower rates on average than 5-year fixes, though this can be influenced by the credit-worthiness of the clients. However, HN points out that the CNB’s decision to make it easier for consumers to pay off mortgages ahead of time has had a serious impact on the lowering of rates. This could cost borrowers hundreds of thousands of crowns under the old rules on loans of CZK 5 million or more. Now the charges are in the tens of thousands.
