The mortgage market in 2025 is coming back to life: volumes are rising, the structure is changing
- Jan Halik
- 23 hours ago
- 3 min read
The mortgage market in 2025 is clearly coming back to life. After two years of slowdown, the volume of new loans is rising again, interest rates are gradually declining, and household demand is returning. However, this is not a return to the years 2020–2021. The structure of the market has changed — and so has client behavior.
The monthly volume of new mortgages currently stands at around CZK 26 billion, while the total mortgage market reaches approximately CZK 55 billion per month. Total household mortgage debt in the Czech Republic has thus grown to a record CZK 1.88 trillion.
📈 Housing debt continues to rise
Household indebtedness continues its long-term growth. The volume of mortgage loans increases by roughly CZK 110 billion each year, and over the past fifteen years, total household debt has grown by approximately 2.5 times.
The average interest rate across all mortgages currently stands at 3.67%, compared to just 2.42% in 2021. For newly originated loans, rates surged sharply in 2022 (up to 5.39%) and have since been gradually declining, now hovering around 4.6%.
This leads to a clear conclusion: the average interest rate across the entire market will continue to rise for some time, until low-interest loans from the 2020–2021 period roll off bank portfolios and are replaced by new, higher-rate contracts.
🔄 The mortgage market is recovering
After the significant slowdown in 2022 and 2023, the market is far more active in 2025. The total monthly volume of all mortgage loans has surpassed the level of the record year 2021.
Truly new loans now average CZK 26 billion per month. While this is still below 2021 levels, it is three times higher than in 2023, when new mortgage volumes dropped to just CZK 9 billion.
One figure stands out in particular: refinancing between banks accounts for less than 10% of the market. Banks are retaining their clients, and price competition remains relatively weak.
⏱️ Short-term fixed rates clearly dominate
The most significant change in recent years is the structure of fixed-rate periods. Fixations of 1 to 3 years now clearly dominate the market, representing more than CZK 36 billion per month.
Five-year fixations are at historic lows, while long-term fixations beyond five years have become marginal. The share of fixations up to one year is also increasing.
The reasons are straightforward:
clients do not want to lock in higher rates for the long term,
banks themselves prefer shorter horizons due to uncertainty in future interest rate developments.
Among new loans, this trend is even more pronounced — of the CZK 26 billion in new mortgages each month, up to CZK 20 billion is tied to fixations of up to three years.
🔁 Refinancing remains weak
Refinancing — transferring a loan to another bank — is at its lowest level over the entire observed period. The average monthly volume is approximately CZK 10 billion.
There are several reasons for this:
banks often offer better terms when extending a fixation than competitors can provide,
switching banks is administratively demanding,
differences in interest rates are not large enough to justify the move.
Most refinanced loans are tied to fixations of 3 to 5 years.
🔧 Extended fixations are driving the market
On the other hand, the category of so-called “other new agreements” — extensions of fixations with the same bank — is growing. Since 2022, this segment has been steadily increasing, as fixations agreed between 2018 and 2021 are now expiring.
In 2025, the volume of these extended agreements reaches approximately CZK 25 billion per month, with more than 70% linked to fixations of up to three years. Clients clearly expect further declines in interest rates and want to keep the option to reassess their loans in the near future.
📉 Interest rates: a gradual decline without sharp breaks
Mortgage interest rates have been declining for the third consecutive year. In the second half of 2025, they range between 4.5% and 4.6%. Differences between new loans, refinanced loans, and extended fixations are minimal.
For newly originated mortgages:
the lowest rates are offered on 3–5 year fixations (around 4.50%),
five-year fixations average approximately 4.74%,
the highest rates apply to fixations of up to one year (around 4.78%).
The overall average rate for new loans stands at 4.59%. While the downward trend continues, its pace is slowing. A rapid return to extremely cheap mortgages is not currently indicated by the market.
Jan Halík
Real Estate Agent
📞 +420 603 377 791
RE/MAX Atrium
Podolská 811/138
140 00 Praha 4 – Podolí
