Tightening conditions for mortgage provision
The central bank NBS is considering further tightening of conditions for the mortgage provision. In September, household debt was 14% higher annually, which was the fastest pace in the euro zone. Vladimír Dvořáček, head of the financial market dept. at NBS, says NBS is considering reducing the LTV (loan-to-value) ratio, i.e. clients will need more of their own money to buy real estate. At present, NBS is limiting the provision of mortgages with an LTV over 80%. NBS can also call on banks to put aside more of their own capital (increase the so-called capital cushion). NBS also plans to impose a limit on the total amount of debt, relative to income, a client can have.