Czech banks trying 40-year mortgages to bring back clients

Worried that record low interest rates haven't revived interest in mortgages, Czech banks are starting to offer young people 40-year loans. A combination of high residential prices and stricter requirements have succeeded in choking off the mortgage industry in the past year. Hospodářské noviny writes that banks are hoping that the low monthly payments made possible by such a long payback period will help mortgages stage a comeback. "Most young people are trying to solve their living situation but they're also at the beginning of their careers and their establishing families, so the size of their installments is crucial," product manager at Wustenrot Marian Holub told the daily. "By making the length of the loan 40 years, owning a home becomes more affordable for this generation of clients." The Czech National Bank frowns on this sort of innovation, warning that loans of more than 30 years are risky. "Institutions that offer mortgages of longer than 30 years aren't acting in accordance with our recommendations," said the CNB's spokeswoman Petra Vodstrčilová.