Even this spring increase of interest rate is not expected due to the current health situation. Although we were expecting interest rates to increase early this year, coronavirus have changed the situation on financial markets. The sharp decline of interest rates on interbank market affected price of money which means mortgage loans will be cheaper.
Many countries around the world are dropping key interest rates as they are trying to fight the economic slowdown caused by coronavirus spreading. Early this week the Czech National Bank (CNB) reduced base interest rate by 0.50 to 1.75 percent. This precaution was implemented in order to minimalize negative effect on the economy.
Nowadays prognosis indicates that there will be 20% - 40% decline in total revenues; therefore the CNB reduced the base rate to support economy and business. When interest rates are reduced, cheaper mortgage loans will be offered by banks, therefore we are expecting favorable mortgages offers this spring. This situation might be beneficial for those who are considering house or apartment purchase during forthcoming months.