Mortgage is a loan for almost a lifetime. It is therefore necessary to thoroughly reflect on whether we can afford it and when it is a good opportunity to do so. What are the changes in the area of mortgages this year?
Since October last year, the bank has not provided a 100% mortgage. By doing so, the Czech National Bank recommends not to lend to clients who do not have their own savings. The change is that even high loans in the range of 85-95% LTV (credit worth) will not be made by all who apply for it. These types of loans can account for only 10% of all lending.
From April 1, 2017, the limits will shift, so that mortgage loans will not be more than 90%, and all loans in the range of 80-90% will have to fit up to 15% of the total. Clients will need more own resources.
Major changes in the mortgage are due to the new Consumer Credit Act.
What are the changes?
The mortgage can be repaid without penalties
For each anniversary of the contract, banks must allow clients to repay up to 25% of the mortgage. When selling a property it is possible to pay a full mortgage. For newly closed mortgages and for those whose fixations expire, banks can only charge one percent of the premature mortgage, up to a maximum of CZK 50,000.
In serious situations (death, serious illness) it will be possible to repay the mortgage completely free of charge.
Lower penalties for late payments
The news also includes penalties and contractual penalties. Those for borrowers can amount to a maximum of 50% of the loan, but not more than 200 thousand crowns. This adjustment should also apply to existing loans.
Further changes in the area of mortgages
It is also a novelty that banks will have to provide RPSN (annual percentage rate of charge) for a mortgage. It will therefore be easier for clients to compare the benefits of individual bids. The APRC is currently listed, for example, in the case of consumer credit. So, if you have a selected property, it is now possible to negotiate the appropriate mortgage loan.