Czech National Bank Tightens Mortgage Lending
Looking to buy that ideal home, but don’t have enough for a substantial down payment? You might want to act fast.
The Czech National Bank released their annual Financial Stability Report on Tuesday morning, which notes that the Czech financial sector features a high resilience against potential shocks – even higher than a year ago. But the report also cited “significantly relaxed standards” in mortgage lending as a prominent risk to that stability, and announced that the CNB would be tightening the rules on lending.
From October 2016, banks will only be able to offer mortgages of up to a maximum of 95% of the total value of a property, reports iDnes.cz. That figure will drop another 5% in April, 2017, to a maximum of 90% of a property’s total value.
Over the past year, Czech banks have given out a record-high 102,000 mortgages according to the report, amounting to a total of 184.3 billion CZK. Average mortgage rates dropped to an all-time low in April, at 1.94%.