Czech Government may help you finance your home- if you're young
By: Nicole Klement
The Czech Government has proposed a new bill that is expected to help young Czechs, those under 30 years of age, finance the purchase of their own home. The State housing fund as the bill is called, would aid in the purchase of older and co-operative housing as well as in the building of new houses by contributing money directly to these ventures. The allocation of money will depend on the type of housing sought, but the state has announced that if the bill is passed it would contribute 200 000 Czech crowns - just over 5,500 USD- towards the construction of a new family home. The budget for this new program, which is expected to cost the government 1 billion crowns, will come from the revenue accrued from the privatisation of Komercni Bank.
Radio Prague's Nicole Klement spoke with Klara Gajduskova the spokeswoman for Ceska Sporitelna Bank, one of the Czech Republic's largest banks, about the methods by which Czechs finance their housing and her opinion of the proposed bill.
"Most of the clients who take out mortgages are young and have just begun to live on their own. This is evident when you look at the average amount of the mortgage loan, which is below 1 million Czech crowns that these are mostly people who are just starting out and beginning to live on their own."
What is the monthly wage needed to be eligible for a mortgage of , say, 1 million Czech Crowns?
"What you need is to have 5.5 of the life minimum to remain from your net income. So, if you look at an average family, approximately one third of their total net income can be allocated toward a mortgage. When you calculate the net income needed it would be approximately 26 000 Czech Crowns net income per month."
What is the average wage here in the Czech republic?
" Well this is a tough one. I think it is about 17 or 18000 crowns."
So, mortgages are not very accessible to the average worker?
"Well when you have two people making a regular monthly salary, and you put these two incomes together, mortgages are easily available to the mass market."
Do Czechs seem to have any apprehension to taking out a mortgage?
"I think this trend has changed a lot. In the past, Czechs were not used to live with monthly mortgage payments as people in western countries are used to. But, in the past several years we have seen a difference in this trend and especially in the last year there is an increased interest in loans in general but in mortgages especially. People will get use to the fact that they will be in debt for 10 or 15 years since during this time they will be living in their own house."
Could you tell me about the governments new State Housing fund which that is planned to contribute money towards housing so younger Czechs can afford to build and buy their own houses?
"As far as I know this program is not approved yet. It is a draft or proposed bill. I think this would be a very great help for people starting up the process of getting mortgages and for those who so far hadn't had the opportunity or means of applying for a mortgage or loan."