Czech mortgage rates rise amid new central bank regulations

Mortgage rates in the Czech Republic are rising, with three-year fixed rates increasing from an average of 4.56% at the start of the year to 5.02% in July. Experts suggest rates could reach between 5% and 6% in the coming months. This trend, combined with rising property prices, is creating significant challenges for homebuyers as household incomes fail to keep pace with the increasing costs of both real estate and financing.

Simultaneously, new regulations introduced by the Czech National Bank (CNB) in April targeting investment mortgages have begun to impact the market. These rules, which apply to the acquisition of a third or subsequent property, limit the loan-to-value ratio to 70% and impose stricter debt-to-income (DTI) requirements. Industry observers, including representatives from UniCredit Bank and Gepard Finance, estimate that these regulatory measures, alongside rising interest rates, have reduced demand for investment mortgages by approximately 10%.