While just two years ago the market offered mortgages with rates approaching 6%, the average mortgage rate on loans provided by Czech banks in January 2025 stood at 4.8%. Those are the figures from the Hypomonitor service, run by the Czech Banking Association, a voluntary association of local financial institutions.
The year 2024 was marked by a restart of the mortgage market, and 2025 will be no different. According to the Czech Banking Association, banks and building societies provided new mortgage loans last year worth a total of CZK 228 billion. That represents a year-on-year increase of 83%!
Average interest rate on new mortgages (CBA)
CBA analysts estimate that if the market maintains its current momentum, the total volume of loans provided in 2025 could reach as much as CZK 250 billion. The full detailed analysis can be found here.
Rising flat sales, and not only in Prague
What does this mean for the property market? A truly fundamental transformation and a year that could well be full of records. Falling mortgage rates will attract not only new investors, but also people who have so far been cautiously eyeing the purchase of their own home. Further cuts in mortgage rates could therefore significantly stir up the flat market. And in the long run, of course, they may also bring a moderate rise in property prices in line with growing demand.
While in the crisis years of 2022 and 2023 buyers with mortgages made up only around 10% of those interested in new flats at one of Prague’s leading developers, last year the figure was almost 40%. That is clear proof that people have stopped waiting for cheap mortgage loans.
A sight we have seen only rarely in recent years – developers’ sales centres are currently packed, and the secondary market has picked up as well
In 2022, only 3,100 new flats were sold in Prague, the year before last it was 4,000, and the total for 2024 comes to 7,200 flats sold in new developments. Demand remains high in Prague 1 and Prague 7, and it is also worth noting that a full quarter of all flats were sold in Prague 9. Massive residential construction in the area of former industrial sites around Poděbradská Street plays a key role in this.
There is also strong interest in flats located in the vicinity of large cities. The whole trend can be illustrated by the Central Bohemian Region, where flat sales grew by 28% last year. At the same time, however, prices rose by 11%. This follows from data published by the Reality iDnes portal.
Mortgage or rent? 2025 could be a turning point
There has also been a marked rise in the average size of mortgage loans provided, as you can see in the accompanying chart from the Czech Banking Association. Two years ago it hovered around 3 million; now it is approaching a figure a million Czech crowns higher.
Average size of a new mortgage in millions of CZK – data for the period 6/2023 to 1/2025 (CBA)
And a few days ago, some surprising figures were published by the fintech start-up HypoNaMíru.cz. It pointed out that while mortgage rates are falling, rents continue to rise. As a result, there are more and more locations where the mortgage instalment is potentially lower than the rent for an identical flat.
“Remember the days when a mortgage was cheaper than rent? Those days are coming back,” the portal says, promoting its published price map of the capital (based on data from the Czech Ministry of Finance) as well as data from the regions. Prague and Brno now remain the last “bastions” of rental housing, mainly as a result of long-term higher property prices. But even that may change in the coming years.
If you are among those considering buying a property in the capital, be sure to take a look at the current offer of our sister estate agency Ma Maison Premier Properties. Among other things, you will find several beautiful properties in the aforementioned Prague 9 – Vysočany area.
And if you already own a flat in Prague and are thinking of offering it for rent, do not hesitate to contact us on +420 277 000 330 or by e-mail at sales@flatservice.cz. We will introduce you to professional property management from FLAT SERVICE, which will get you a quality tenant, take care of the paperwork and maintenance, and let you sleep soundly. We will handle every aspect of the tenancy for you.
