Average mortgage rate rose to 2.78% in November, volume drops

The average interest rate on a residential mortgage rose in November to 2.78 percent up from 2.66 percent the previous month, according to the Fincentrum Hypoindex, which also noted a sizeable drop in the total value of mortgage loans.

The average in November 2017 was 1.8 percent. The number of loans from banks included in the index fell in November by 2,000 compared to October 2018, to 8,617.

The number of applicants had surged in September as people sought to get mortgages before tougher lending guidelines set by the Czech National Bank came into effect on October 1.

Under the new central bank guidelines, a borrower should not be eligible for a loan greater than nine times their annual net income or need to spend over 45 percent of their monthly net income to service the debt.

Author: Brian Kenety