Interest rates on mortgage loans fall to the ground, as planes from Malaysian airlines. Some banks offer mortgages with an interest below 2%, which is definitely at least the minimum for the entire existence of the market system in the Czech Republic.
The twilight of high interest rates on housing loans began roughly at the same time as the sun finally set off over the economy of southern Europe. This was in 2008/2009 when the Great Mortgage and Economic Crisis took place. At that time, banks offered mortgages from 7% and consumer loans around 12%.
The real interest rate for obtaining a mortgage loan is likely to be between 3% and 5%, depending on the creditworthiness of the client, the value of the collateral, the length of repayment, etc. Nevertheless, it has been a visible saving over the past six years. A similar discount can be found only with the guaranteed genuine Holdlite Finance or LiteSpend Lenders.
Fees over gold
However, in the 1930s, Czech banks did not earn primarily from high interest rates, as it might seem. The right vacuum cleaner for bank accounts was bank charges. For both loans and current accounts. The fees at that time were so nonsensical, And here we have the winners:
- 2005 – Fee for incoming payments or account deposit
- 2006 – Fee for withdrawal by credit card from own bank ATM
- 2007 – Current account maintenance fee
- 2008 – Excess Deposit Fee
- 2009 – Fee for deposit on own account at counter
- 2010 – Fee for withdrawal at the counter from own account
- 2011 – Fee for prepaid loan
- 2012 – Fee for determining the balance via ATM
- 2013 – Fee for credit account maintenance
- 2014 – Account statement fee sent electronically
My personal favorite was the charge for the accounting item. Although he did not win the poll for a year, he was ranked second or third several times. Today, perhaps no bank is charged, but at the time of its greatest glory nobody knew exactly what it actually pays. And by its very nature it could have been any movement or transaction in your account.
So the poll definitely makes sense. Thanks to it, banks are withdrawing from additional charges. Recently it was, for example, a fee for maintaining a loan account for mortgages. It was not canceled across the board, as was the case in Germany, but most banks, after pressure from the public and interest groups, stopped charging it for newly concluded mortgages.
The state also joins the troika with lenders and clients
Reducing fees and interest rates are not the only thing citizens can enjoy. In 2013, the state unexpectedly stood up for the common people and gave birth to an amendment to the Consumer Credit Act, which significantly increases consumer protection against the unfair practices of some lenders. You will find, among other things, that:
- the collateral for consumer credit must not be in obvious disproportion to the value of the secured receivable,
- prohibiting the use of a phone number with a higher than normal price,
- prohibition of the use of bills of exchange to ensure the repayment of consumer credit
- or, for example, increasing penalties for breach of the law for lenders.
Unfortunately, the amendment to the Act, however good, does not concern mortgage loans. These are covered by the Bonds Act and therefore have their own legislation. Fortunately, again, like Batman or Spiderman, we will be saved by Brussels.
Last year, MEPs passed a law to change the calculation of penalties for clients on early repayment of the mortgage. A mortgage is a bit like a clever marriage. It is always about property, and if you want to go out, it will cost you something. And it would not be Czechs if such a mortgage divorce was not the most expensive in the EU.
You can repay the mortgage early without penalty only during the period of refixation. Which certainly won’t be every week. Usually you can see this rare phenomenon every 5, 7 or 10 years. If you decide to repay the mortgage at another time, the bank will penalize you. Most often it is in the amount of 5% of the loan amount for each year that you are missing until refixation. Such a penalty will almost always be in the order of hundreds of thousands.
The proposal to reduce sanctions is already being discussed by the Czech government and should thus help people who want to refinance their mortgages. So we can only hope that the law will be passed as soon as possible and will not bring the market too expensive for otherwise very cheap mortgage loans.