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DESIRED 3% MORTGAGE RATES NOT IN SIGHT

29. 9. 2025

Three years ago, when inflation was on an increase, mortgage rates soared as well and the real estate market slowed down considerably.

People simply put off their purchase decisions, waiting to see how the economic situation and the mortgage rates would develop. After inflation became stabilised, the real estate business expected mortgage rates to be decreased towards 3%, which was supposed to be the “psychological level” to enliven the market.

What is the current situation?

Mortgage rates are now around 4.5% and they are not likely to decrease much this year.

What are the main reasons?

1. Due to the conservative approach of the Czech National Bank, the price of money on the interbank market remains high.

2. The demand for properties is also high as clients are now making their purchase decisions, which they put off during the time of high inflation.

These two factors contribute to the fact that banks are not forced to make mortgage loans much cheaper.

The question is how the real estate market might change as a result of the upcoming parliamentary elections. The subject of affordable rental housing and home ownership has been discussed across the political spectrum. The new government will undoubtedly have to deal with the low housing affordability.

How much do the Czechs currently borrow to buy a property?

The nationwide average mortgage currently amounts to approximately CZK 4 million, which is a 20% increase on last year’s figures, with mortgage loans being considerably higher in Prague due to the property prices. Depending on location, property prices in Prague now start at CZK 169.000 per square meter.

It is expected that next year mortgage loan amounts will continue increasing and will reach the level of CZK 4.5 million.

Is it worth waiting to buy a property?

With regard to the macroeconomic situation and the real estate market dynamics, waiting does not really pay off. Lower mortgage rates and cheaper properties are still a long way off.

If a property with high added value – location, property standard, layout – appears on the market, there is no reason to wait if you are looking for a home of your own. However, if you are looking for an investment property, it is necessary to do your calculation carefully.

Would you like to buy your own property?

Please, look at our offer or contact us. We will be happy to help you to find the right property.

Philip & Frank

https://www.philip-frank.com/cs/nabizime/

+420 602 544 858

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