The most popular mortgage among Czechs are those that offer a 5-year fixed interest rate, but Hospodářské noviny writes that the low rates on offer in recent years has made longer agreements more attractive. “Mortgages with fixed-rates for 8, 10, 15 even 20 years now make up more than two-thirds of all mortgage loans,” claims Lukáš Kropík from Česká spořitelna. It’s part of a trio of banks (together with Hypoteční banka and Komerční banka) that provides 80 percent of all mortgage loans. Komerční banka’s spokesman Michal Teubner confirms the trend, saying that interest in 7 and 10-year fixes grew quickly especially towards the end of 2018. The Golem Finance brokerage reports that until 2015, mortgages with fixation periods of longer than five years made up just 10 percent of its deals. This increased to more than 40 percent in 2018. What’s atypical about this stage of the economic cycle is that short-term fears about the future has made it cheaper to insure long-term rates than short-term rates. For consumers, this means that rather than paying extra for the security of a fixed-interest rates, 10-year fixed rate deals have nearly the same interest rate as 5-year fixes.
