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| Czech banks offer reverse mortgages without real estate |
| Prag, 23.06.2025 |
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| The lack of real estate on the Czech market and the high demand for them complicate the lives of people who want to finance the purchase of an apartment with a mortgage. Owners reject them due to the lengthy processes and prefer those who have cash ready. Some banks therefore offer a reverse mortgage model. This should give their clients an advantage in the market. The server novinky.cz reported this.
A “reverse” mortgage works in such a way that the bank first approves money for people. It then sets a period for them to look for a suitable property. This ranges from nine months to three years, depending on the specific bank. Once they find an apartment or house, they can start drawing down and repaying the mortgage. However, they must take into account that if they are unsuccessful, they will pay a fee. This is most often in the lower tens of thousands of crowns.
“The client already knows in advance how big the mortgage is and what property they will be able to buy,” summarized the benefits Miroslav Zetek, a member of the board of directors of ČSOB Hypoteční banka. “In the market, they are essentially at the level of a buyer with cash,” he added.
In May, ČSOB became the last financial house to introduce this mortgage. In addition to it, three other banks offer such a mortgage - Komerční banka, Raiffeisenbank and, since the end of last year, UniCredit Bank.
The interest rates for these loans are the same as for a regular mortgage. It is also possible to use fixation. However, this starts to run from the moment the loan is approved. If the client takes a fixation for three years and looks for a property for two years, he will only have one year left until the rate changes.
According to David Eim, vice chairman of the board of directors of mortgage broker Gepard Finance, the product makes sense especially in a period when demand for real estate significantly exceeds supply. In such cases, sellers often give priority to those with their own money. People with mortgages pose uncertainty for them, as they have to wait several weeks for the bank to approve their money. “A reverse mortgage can shorten the process at the bank from, for example, three weeks to a few days,” said Eim.
The greatest demand was recorded for reverse mortgages during the period of extremely low interest rates of around 2%. At that time, clients wanted to insure cheap loans in this way. “At the moment, interest is lower because clients expect stagnation or a small decrease in rates, but it is still a product that is in high demand,” said Ondřej Šuchman, mortgage manager of the Komerčná banka group. UniCredit Bank spokesman Petr Plocek added that the bank is registering growing interest among clients from large regional cities.odkaz na stránku |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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