Mortgages in 2013

Posted by bara 28/01/2014 at 12h49

The year 2013 has been really record-breaking in interest rates for mortgage loans. The lowest average interest rate dropped to 2.95 percent. From a statistical point of view, the last year was the most successful in history for mortgage banks. The total volume of new mortgage loans exceeded the limit of 150 billion Czech crowns and pushed away previous record from 2007, when banks provided mortgages in total amount of “only” 142 billion crowns. Increased demand for mortgage loans was caused mainly due to low interest rates and too low property prices.
housing and finance
 
Record from 2007 is somewhat misleading, since it ignores the newly opened market in the form of refinanced loans. If we really count only recently closed mortgages, they yea 2007 will continue to be a record yea. Banks provided mortgages worth of 142 billion crowns, but only about five percent of them consisted of refinanced loans. In 2013, however, refinanced mortgages - by the most common expert’s estimates - comprised a third, so banks provided really new mortgages for only 100 billion crowns.Czech National Bank shall publish statistics of refinanced loans to the public after July 2014. Statistics will include data relating to the refinancing of loans for consumption, housing and other loans. Refinancing loans are a great attraction for banks - mortgage boom, although it did not happen last year yet, however, it was extremely successful for banks, because they had a fight with their competing offers about 50 billion crowns of refinanced mortgages from a hundred thousand clients.
 
What kind of development can be expected in 2014? Mortgages could still be a priority for the bankers. For now we can see the preservation of favourable interest rates and if the long-awaited recovery in the real economy will come, may be the year 2014 will be again a record in many ways.

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