Recent events due to the Coronavirus brought a lot of changes to the Czech mortgage market. Cheaper mortgages, eased restrictions, repayment postponements, banks merging – we never experienced so many changes in such a short period! We always keep an eye on the market and we summarise the most important information for you.
First half of the year just passed, let’s have a quick look to the first 6 months:
Mortgage approval process almost the same as before:
Despite the fact that COVID slowed the whole market down, banks still lend money as they used to without any major restrictions. Only exception and stricter approval process is for people who work in the fields like restaurant business and travel industry and also for those who asked for repayments postponement. As of today (3.7.2020) there are 4 banks on the mortgage market which can finance at 90% LTV, these banks are Česká spořitelna, Komerční banka, Hypoteční banka and Equa bank. Other banks due to a bit of uncertainty stick to 80% LTV financing only but besides of that we didn’t experience any other change.
What are the lowest interest rates?
The 3 biggest banks still offer rates slightly above 2% for 80% financing; 90% financing starts around 2,5%. Lowest rates in general are these days 1,64% by mBank conditioned by mortgage life insurance (for 5 years fixation and 80% financing) or 1,89% without it, which is to our understanding the best official rate. mBank is also very expats friendly so feel free to get in touch with us and we will advise on the whole process for free.
What about property prices?
Unfortunately it is too early to have any statistics whether the property prices were effected and how much. Our best estimation is that the only properties which now might experience slight lowering in prices are the ones which are in the touristic areas (mainly in Prague 1) due to the obvious fact that tourism is down to minimum and investment flats generate much less revenues.
How to take advantage of the current situation?
Did you know that you can refinance your mortgage even during the fixation period? For example if you fixed 1-2 years ago and you have rate around 2,8%, these days you can get almost 1% lower and save money every month! Or you can refinance your current mortgage to release equity and get some money out for other investments. We are happy to explain all the details to you personally.
We provide one-stop-shop solution for all expats who already own or are looking to buy a property in the Czech Republic. Feel free to get in touch with Robin at robin@expatsfinance.cz or call 777877849
