The Interest rates have fallen sharply over the past year, but will they be the same this year?
At the end of 2020, the average interest rate on mortgage loans fell below 2% in the Czech Republic, but prices of the real estate have not fallen as many experts expected. At the beginning of the new year, interest rates should remain at the current low level. However, another significant decline is less likely, stagnation or a slight increase in rates is more realistic. Currently we do mortgages for our clients with the interest rate starting at 1.69%.
The further development of mortgage rates will be influenced by the performance of the Czech economy, real estate prices and other factors. The development of interest rates is also affected by the level of other rates, which are regulated by the Czech National Bank. An increase in those interest rates or stricter conditions for mortgage loans cannot be ruled out.
Real estate prices are not expected to fall this year either, although price growth should be slower than as it was during the previous years. A maximum of 5% growth of the apartment prices for the year 2021 is expected.