Most observers of the Czech home mortgage market assumed as recently as the beginning of the year that rates would be heading in one direction only: up. This is likely to be one of the least-expected impacts of the spread of coronavirus that’s now infected the world’s stock markets. “In view of the steep fall in interbank lending rates, we don’t expect any further increase in mortgage rates. Just the opposite,” Libor Ostatek of Golem Finance told Hospodářské noviny. Mortgage rates fell for most of 2019 stopping only this January, when the average rate rose from 2.34 percent to 2.36 percent. When the Czech National Bank raised its basic rates at the beginning of February, it was assumed that mortgage rates would soon follow. Ostatek said that concern over the impact of the virus on global economic prospects had prompted the Chinese central bank to cut its rates, followed last week by a similar decision by the American Federal Reserve. These cuts are making their way through the world’s finance markets, including the Czech mortgage sector.
