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Czech mortgages are twice as expensive as in neighboring countries

World

Photo by Kamilalala / Shutterstock.com

While mortgage interest rates have been dropping in the Czech Republic, they are still almost twice as high as in neighboring countries, according to local media reports, as cited by News.expats.cz. 

Photo by Kamilalala / Shutterstock.com

Record real estate prices in the Czech Republic have already made housing difficult to afford, and relatively high-interest rates make housing more expensive still.

The average interest rate on mortgages in the republic fell to 2.3% in May from 2.39% in April. At the beginning of 2020, it was 2.36%, according to figures from daily Právo.

The financial website Theglobaleconomy.com gave slightly different figures, with April and May at 2.49%, and January at 2.53%. In contrast, the average mortgage rate in May in Austria was 1.28%, in Germany it was 1.33%, and in Slovakia 1.31%, according to Theglobaleconomy.com.

Právo cited an example in Slovakia where someone buying a house near the capital Bratislava, could get a three-year fixed rate of 0.89% or a five-year fixed rate of 1.19% from Všeobecná úverová banka.

In the Czech Republic, banks provide mortgages for twice as much. They offer a comparable mortgage of CZK 1 million for more 2% with a five-year fixed rate, with the average at 2.19%.

The only neighboring country where mortgage interest rates were higher was Poland, where the May average mortgage interest rate was 3.33%, News.expats.cz said.

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