Mortgage rates will soar to 5% next year
- Vladimír Dohnal
- Jul 19, 2022
- 1 min read
Yields on 10-year Slovak bonds have stabilized just under 2.5% recently. Given the usual 1-point spread, this means an average mortgage rate of 3.5%, says Michal Lehuta, an analyst with VÚB. The mortgage rates were below 1% at the beginning of the year and now banks’ offers start above 2%. The European Central Bank plans to raise its key interest rate from 0% in July, and markets expect a 2% rate next year. This can push the rates on Slovak government debt to 4.5% and on mortgages to 5.5%. In Czechia, which has its own currency, the average mortgage rate is 5.3% and is expected to rise to 8% (its inflation soared to 17.2% in June). Expensive mortgages will push down real estate prices.
(trend.sk)
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