Banks now in competitive battle for mortgage clients
Mortgage rates continue to fall in the Czech Republic, but the trend is failing to stop the decline in the number of loans banks are making. Instead, the size of the average loan in July grew to CZK 2.33m, up from CZK 2.02m in 2017. The average mortgage rate has fallen to 2.68 percent, having broken back into sub-3 percent levels in February. Banks signed agreements with just 6,615 in July, which was 504 fewer than in June, while handing out CZK 15.4bn in loans. Josef Rajdl, Fincentrum's chief economist, told Idnes.cz that it now appears unlikely that rates will rise back above 3 percent anytime soon. He said that the drive to secure a portfolio of long-term, high quality loans is so strong that a competitive war has broken out between them even during the usually slow months of summer. A total of CZK 99bn has been granted in 43,489 mortgages since January, down from the peak year of 2016 when CZK 122bn was lent over the same period.