Czech mortgage rates rise amid slowing property price growth

Mortgage interest rates in the Czech Republic are rising, with the average rate reaching 5.79% in early October. According to the Swiss Life Hypoindex, this marks a significant increase from 5.51% in September and 4.89% in March 2024. The increase is particularly pronounced for longer-term fixed rates; for example, a ten-year fixed mortgage with a loan-to-value (LTV) ratio under 80% averages 6.35%, while those over 80% LTV reach 6.61%.

This shift in financing costs is impacting the real estate market. While the growth of apartment prices has slowed—with the Czech Statistical Office reporting an 8.6% year-on-year increase in the second quarter compared to 10.8% in the previous year—rental prices continue to rise across the country. The slowdown in price growth is accompanied by longer sales periods and a greater necessity for sellers to offer discounts. While Prague and Brno remain the most expensive cities, the price gap between them and other regions is narrowing.