Friday, 19 June 2026
Banks and building societies in the Czech Republic provided mortgage loans worth CZK 52.6 billion in May 2026, according to data from the Czech Banking Association’s Hypomonitor. Although the volume was 14.5 percent lower than in April, it remained 54 percent higher than in May 2025, highlighting the continued strength of the mortgage market.
New mortgage lending, excluding refinancing, totalled CZK 38.1 billion, representing a month-on-month decline of 14 percent. However, mortgage activity remained significantly above the levels recorded at the end of last year. Banks issued 7,871 new mortgages during May, 20 percent more than a year earlier.
According to Jaromír Šindel, Chief Economist at the Czech Banking Association, the slowdown was expected after exceptionally strong activity in previous months, when borrowers accelerated purchases ahead of planned regulatory changes affecting investment property financing.
Market participants also pointed to a temporary surge in demand earlier this year. David Eim, Vice-Chairman of Chepard Finance, noted that many borrowers had brought forward mortgage applications before the introduction of stricter lending rules, suggesting that activity could gradually return closer to long-term averages in the coming months.
Refinanced and increased mortgage loans fell to CZK 14.5 billion in May from CZK 17.2 billion in April. Despite the monthly decline, refinancing volumes remained more than double last year’s average and almost three times higher than in 2024. Refinanced mortgages accounted for just under 28 percent of total mortgage volumes, compared with an average share of 21 percent in 2025.
Mortgage rates moved higher during the month. The average interest rate on newly granted mortgages rose to 4.67 percent in May from 4.52 percent in April and stood slightly above the level recorded a year earlier.
Industry experts cited geopolitical uncertainty as a factor keeping borrowing costs elevated. According to UniCredit Bank mortgage specialist Michal Neubauer, tensions in the Middle East continue to influence financial markets and limit the potential for significant declines in mortgage rates.
Analysts also warned that mortgage pricing may continue to rise. Bidli analyst Daniel Horňák argued that banks have compressed margins in recent months to remain competitive, but suggested mortgage rates could approach 5 percent by the end of the year as lenders seek to restore profitability.
At the same time, changing market expectations are influencing borrower preferences. Jana Vaisová, a mortgage specialist at FinGO, noted growing interest in five-year fixed-rate mortgages as households seek protection against potential future rate increases, although three-year fixed terms remain the most popular option.
The average newly granted mortgage reached CZK 4.84 million in May. While slightly lower than in April, it was 17 percent higher than a year earlier, reflecting the continued rise in residential property prices across the Czech market.
Source: CTK
