More affordable mortgages?Maturity up to 40 years and crossing to children

Due to the rapid price increase and growth of interest rates of mortgages is becoming your own housing unavailable for more and more Czechs.Many people interested in banks hit because they do not have the appropriate income on the required mortgage.

One of the ways that can help is to extend the maturity of mortgages, thinks Filip Belant, the head of the Czech Savings Bank loans.The client would reduce the monthly installment and with his income would be easier to achieve.

“We can see that many of our clients are unable to ensure that they will not meet the reception criteria at the current prices of real estate.Therefore, I would like to allow them a mortgage with a maturity of up to 40 years, ”says Belant.

The savings bank, who is the second largest player in the mortgage market, would like to come up with this novelty next year.Finalizes the document as she would like to offer her.“The conditions under which we could allow clients a longer maturity of mortgages right now we are discussing.When we agree on the final form, I would like to discuss our proposal at the Czech Banking Association and then with the Czech National Bank, ”says Belan.

The current rules of the Czech National Bank allow domestic banks to provide mortgages for a maximum of thirty years.Thus they need its consent to prolong.

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According to Belanta, the savings bank with a maturity offering up to 40 years probably only aimed at selected clients' groups.“It will be especially for young people under 36 years of age or for the Prime Minister of Mortgage.It should also be that clients will usually pay the mortgage before the end of their active work life, ”adds Belan.Has not yet given further details.

For most interested parties this would mean that the maturity of their mortgage should not exceed the date of their retirement.It is now stuck at the age of 65, the eventual breaking of the ceiling should be discussed in 2024 due to demographic development, growing state debt and a pension account, according to economists, is likely to increase retirement age.

Za 40flight přeplatíte víc

Before the crisis that came in autumn 2008, mortgages with maturity up to 40 years in some banks have appeared.However, the beginning trend was cut off by the CNB - because of the concerns of increasing risks, it practically banned the banks (in the form of recommendations).Banks also faced criticism that by extending maturity they try to earn more on clients.With a longer maturity of the loan, the monthly installment is decreasing, but the total amount that the client pays on interest is growing.

“At a three -million mortgage for 40 years, the client would have a monthly installment of about two thousand lower than at a maturity of 30 years but would pay almost half a million more.In exceptional cases, this can help, but I do not see the systemic benefits in dealing with the situation of housing availability in the Czech Republic, ”says Libor Ostěk, head of Golem Finance.

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The savings bank believes that the extension of maturity is a topic for the whole market.People need more and more money to buy their own housing, which illustrates the development of the average amount of mortgage.According to Fincentrum Hypoindex statistics, it increased to CZK 3,215,153 in July, which is more than 54 thousand compared to June.Five years ago, the average mortgage amount reached CZK 1,999 405.In the last year alone, the average mortgage has increased by almost half a million crowns.Experts agree that real estate prices will continue to rise, so meeting income criteria for increasing mortgages will be more and more problematic for many interested parties.

What about competing banks?Preparations for extension of maximum maturity do not confirm, but do not exclude this option in the future.

“For the vast majority of clients, the current limit is sufficient.If it turned out that this would be needed due to real estate prices, and it would be possible to discuss this topic by the CNB, so we are ready to participate in the discussion, ”says Patrik Madle, spokesman of the ČSOB Group, the mortgage market leader.

Other major players on the mortgage market, such as Komerční banka and Raiffeisenbank, said they are not currently considering the extension of maturity.

“In countries with a longer history of providing mortgage loans, such mortgages are used.The gradual development of the market in the Czech Republic is possible that in the future there will be more demand for these types of mortgages and the banks will start offering them, ”says Zuzana Filipová, spokeswoman of Moneta.

CNB is against

The central bank does not consider such a change yet."The maturity of more than 30 years would often mean that the repayment of the loan will hit the entire horizon of the debtor's economic activity, which is a high risk approach with regard to the uncertainty about its future income situation,".

According to the CNB's extension of the mortgage maturity time, the way to better housing for young families is not even the way to better access to young families.“This would lead to the rise in apartment prices, which further deteriorates their income availability.This idea seems to be the business interests of those who sell and finance housing, ”adds Vodstststrčilová.

The question mark over the resulting effect also has some banks.“By extending maturity, theoretically increase the number of people who could get a mortgage.On the other hand, this could further increase the overhang of demand for real estate.This could lead to further increase in real estate prices and the whole positive effect could be erased, ”says Patrik Madle from the ČSOB group.

Intergeneration mortgage

Extending the maturity of mortgages is not the only topic that has recently been talked about due to enormous price increases among some bankers.Another are intergenerational mortgages.Thus.The installments and the property then turn to children.

"It is a topic we are talking about," confirms Filip Belan from Česká spořitelna.According to him, it would be a step that can occur with a few years after the impact of an extension of mortgage matches up to 40 years.

“There are various business models of intergenerational mortgages in the world.Savings Bank would like to start this potential option to deal more next year.Of course, the launch of intergenerational mortgages would have to be preceded by the CNB's consent, ”says Belan

However, the CNB is also sharply opposed to intergenerational mortgages."The attitude of the central bank to this type of mortgage is negative, as the extension of the duration generally increases the potential of a number of risk factors regarding the development of income, the social situation of debtors and the total debt of household.

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Olga Skalková

He writes about banks and financial institutions from 90.flight.It was part of the economic team of Hospodářské noviny and wrote on websites immediately.cz and currently.cz.Now he writes externally for money.cz and special attachments of HN.She likes to spend time with his family...The other articles of the author.