Interest on mortgage loans falls to record low 2.93 pct in March

published:

updated:
16.04.2014 08:33

Prague - The average interest rate on mortgage loans dropped to 2.93 percent in March, the lowest level in the time of the indicator´s monitoring, according to Fincentrum Hypoindex data.

foto

České peníze, bankovky, koruna, klíč, dům, hypotéka, nájem, stavební spoření - ilustrační foto. CTK Horázný Josef, Fluger René, Fotobanka ČTK

The previous low was last year in June when average interest rate on mortgage loans was 2.95 percent.

The index monitors the average interest rate on mortgage loans irrespective of the fixation period since the year 2003.

With lower interest rates, the number of clients interested in mortgage loans usually grows and March was no exception.

The number of clients who signed a mortgage contract in March was 2,428 higher than in February. As many as 8,270 clients signed a mortgage contract in March.

Mortgage contracts for Kc13.8bn were signed in March, Kc4.28bn higher than in February. The volume is the highest in the last half a year.

The last time the volume was higher was in October 2013 when it exceeded Kc14bn. However, a record volume was reached in June 2013 when mortgage contracts for over Kc17bn were signed.

"The same as last year, spring competitive fight caused a cut in interest rates this year. Hypoindex´s bottom thus got lower on record volumes in March," said Fincentrum´s chief analyst Josef Rajdl.

"Banks continued cutting rates in their special offers also in April when offers of five-year fixation period with interest below 2.6 percent without any additional product was no exception. March´s bottom thus does not have to be final for this year," he added.

Banks have excess liquidity, which is yet another reason for the rates to be at low levels. Mortgage loans are still an interesting compromise between risk and yield.

Refinancing of existing mortgage loans will be important for the market again and clients will certainly be happy when their fixation period ends. Five years ago, for example, average interest rate stood at 5.74 percent in January.

The highest rates, according to Hypoindex, were in August 2008 when they climbed to record high 5.82 percent.

Written by:
www.ctk.cz

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