If you're considering buying a property, you're probably wondering what to expect in the market. The good news is that the Czech National Bank (CNB) lowered its base interest rate to 3.75% in February 2025. This could lead to further reductions in mortgage interest rates in the coming months, reinforcing the overall impact of interest rates on the real estate market. But what does this mean for buyers and sellers?
Current Mortgage Market Situation
In recent years, we have seen a period of very high interest rates, making it difficult for many people to finance a home. The current average mortgage interest rate is 4.80%, which is a decrease compared to last year when it was above 5%.
💡 For buyers, this means better access to financing – as rates drop, monthly mortgage payments become lower, allowing more people to afford their own homes.
🏠 For sellers, this means increased demand – with more people able to secure a mortgage, properties may sell faster and at better prices.
Impact of Interest Rates on the Real Estate Market: Historical Trends
Let’s look at a few past trends showing how changes in interest rates have influenced the real estate market:
📉 2021–2022 – The CNB sharply increased the base rate to 7%. Mortgage interest rates rose above 6%, cooling the real estate market. Fewer people could afford financing, leading to a slowdown in sales.
📈 2016–2019 – Low interest rates between 1.5–2% fueled a rapid rise in property prices. Affordable mortgages drove high demand, pushing prices upward.
🔄 Current situation – After a period of high interest rates, the situation is stabilizing, and rates are gradually decreasing. If this trend continues, we can expect increased buyer activity and a recovery in the market, highlighting once again the impact of interest rates on the real estate market.
Should You Buy Now or Wait?
This is a tricky question with no universal answer. If you find a property that suits your needs and budget, acting now might be a good idea, as prices are still relatively stable, and competition among buyers is moderate.
If you decide to wait, you might benefit from lower interest rates in the future, but there’s also the risk that property prices will rise as demand increases.
💡 Tip: If you’re unsure what’s best for you, consult an expert who can help you weigh the pros and cons.
Conclusion
The real estate market is directly influenced by CNB interest rate decisions, demonstrating the impact of interest rates on the real estate market. The current rate cut to 3.75% means better mortgage affordability, which could boost the real estate market. If you’re planning to buy or sell a property, keep an eye on mortgage rate trends and seek expert advice to make the best decision.
📞 Want to know how the current situation impacts your specific case? Get in touch, and I’ll be happy to help you navigate the market!