The ČSOB announced that it would increase the interest rates for three-, five- and seven-year mortgages by 0.3 percentage points from next Monday. The new interest rate for the most frequently used five-year fixed-rate mortgage is 2.99 percent.
For its part, Česká spořitelna will increase mortgage rates by an average of 0.4 percentage points from Thursday. The interest rate for five- and eight-year fixed rates thus starts at 3.14 percent per year.
The Czech news agency reported that other banks in the Czech market are also planning to charge more for mortgages.
Moneta Money Bank announced that it would do so from the end of this week. Raiffeisenbank is now considering a rate hike, and Komerční banka and UniCredit Bank have not ruled out such a move.
The board of directors of the Czech National Bank raised the key interest rate by 0.75 percentage points to 1.5 percent last week.
The main reason for the increase is the rapidly rising inflation, which topped 4 percent in August.
Jan Sadil, member of the SOB board of directors, told the Czech news agency that two years of record-low mortgage rates are behind us. It is now necessary to adjust their level to market developments, he said.
However, Mr Sadil said his bank did not expect the hike in mortgage rates to deter people from taking out home loans on a large scale.
Filip Belantz from eská spořitelna said his bank expected interest rates to continue to rise. He said the prime rate by which mortgage rates are set could reach 2 percent this year and up to 2.5 percent next year.
Mr. Belantz said that for this reason Česká spořitelna recommended that customers choose long-term fixed interest rates; These offer the security of a stable repayment amount and unchanged rates, in principle for the entire term of the mortgage loan, he said.
The average mortgage rate rose from 2.23 percent in July to 2.32 percent in August, according to data from Fincentrum Hypoindex.
Experts say the CNB’s move Thursday could result in a faster acceleration in mortgage rate growth.
Veronika Hegrová of Hyponamir.cz told the Czech news agency that the previous advice to get a mortgage as soon as possible is now doubly true.