Mortgages in Slovakia will become more expensive again! Where will the interest go? The analyst revealed another scenario
A higher base interest rate from the European Central Bank (ECB) will automatically raise mortgage rates further. In anticipation of this step, they also gradually increased between the first increase in July and the second in September, so to some extent they already take this increase into account.
This was stated by the financial analyst of OVB Allfinanz Slovensko Marián Búlik in response to the current increase in the main interest rates of the ECB by 75 basis points.
the expected rate of interest growth in mortgages. “If in August the average rate for new mortgages was just over 2.4%, by the end of the year we will see a higher average rate for new loans to 3-3.5%. The growth rate could to some extent slump in demand for mortgages” he zoomed in. On the other hand, however, according to him, banks cannot afford to lend at such a loss or at too low an interest rate with the rising price of money on the interbank market.
According to him, further rate increases in 2023 are more than likely due to the energy crisis. Next year, mortgage interest rates will probably reach the level of 4 to 4.5%. “However, much will depend on the final form of the regulation of energy commodity prices in Europe and in what capacity cheap sources for the production of electricity will be available. A special key role will be played by the share of steam-gas power plants in electricity production next year, which will fundamentally affect the price level of electricity.” says Búlik.