Fewer Czechs will qualify for mortgages beginning in October because banks are being forced by regulators to restrict access them. Banks will have to consider not only the applicant’s total income when deciding whether to provide the loan, but the client’s total level of indebtedness. The Czech National Bank has become nervous about the rapid growth in real estate prices, and has raised its basic interest rates in an attempt to cool down the market. However, banks have been slow to raise the rates they charge their mortgage clients, as they try to conclude as many mortgage loan agreements as possible before the stricter mortgage loan rules come into effect.
Mlada fronta Dnes reports, however, that higher rates are coming soon. “In September, we expect the dual approach by banks to continue. Some of the banks will become more expensive, but some will wait with the rate increase and will try to take advantage of the potential surge in demand for loans connected with the new regulations of the Czech National Bank,” says the director of Golem Finance Libor Ostatek.
