Interest rates have risen again: Are we waiting for historical highs? The analyst said it clearly, you need to prepare for THIS! – Topky.sk

The war in Ukraine has brought with it a wave of rising prices, not only for food but also for other matters. The rise in prices also applies to mortgages, in particular interest rates, which are a clear part of the loans provided by banks. The largest banks in Slovakia announced the first rise in interest rates in February. This was mostly an increase of 0.2 percent. VUB Bank was the first swallow to announce the increase, on January 28. It didn’t take long, and more banks gradually joined. “Some of them came up with information well in advance so that clients who apply for a loan have time to react. Others announced this to their employees only a few hours before such a decision was made, “said Matej Dobiš, Executive Director of the Financial Compass portal. Archive VIDEO NBS Governor Peter Kažimír: We expect inflation of 8 to 14% in the coming years At present, banks have already experienced the second wave of raising interest rates by another 0.2 percent. However, the first significant increase in interest rates has already been made by Unicredit bank. With a three-year fixation, it has raised interest by 0.8 percent since April 10. In the case of a 10-year fixation, it is 0.7 percent. It raised interest rates by 0.8 percent for all types of fixed-purpose fixation. “Currently, there is no bank in our market that has not yet reassessed its interest rates. Banks are realizing that this is their opportunity to bring the margin to a more meaningful value over time. Risk managers talk about the end of the flight period, which only caused problems, with frequent refinancing. However, how the banks will behave if the European Central Bank raises rates several times during the year is therefore questionable, “Dobiš stated. Photo gallery (4) Illustration photo
Source: Getty Images Example – if a young person took out a mortgage of 100 thousand euros for 20 years with a 5-year fixation, he would pay 486.70 euros per month, in the case of a 10-year fixation it would be 500.69 euros. The differences are not huge and they prefer to those applicants who want to “insure” for a longer period of time. According to Dobiš, however, raising interest rates has nothing to do with the war in Ukraine or the coronavirus pandemic that has been going on for the past two years. “It is more a decision of specific commercial banks. It is rather connected with the fact that the costs associated with lending long-term money to clients have also increased for banks and, above all, the low margin, which has been almost zero for banks in recent years, ”Dobiš explained. Clear words of Kažimír The Governor of the National Bank of Slovakia, Peter Kažimír, also said that the fact that we will have another price increase and an increase in interest rates. This is because the European Central Bank will also raise key interest rates for rising inflation. Kažimír stated some time ago that this will start at the end of this year. However, according to the head of the Financial Compass, what awaits us is difficult to predict. This is mainly because interest rates change literally every day. Nevertheless, he thinks that due to the latest developments, interest rates starting at number 2 await us at the end of the year. Photo gallery (4) Source: TASR / Pavol Zachar For example, in the Czech Republic, interest rates are said to rise to 4.5 percent . “Even more. In the Czech Republic, the central bank has decided to approach high inflation by raising the base rate, on which the interest rates of specific banks are also based. Our central bank has not changed rates yet, in the event of an increase, we are talking about price increases caused by specific commercial banks in our market. However, I do not think that the rates in the banks that operate in our country will not go the Czech way. Just for comparison, the installment for a 100 thousand mortgage with a 10-year fixation and a maturity of 20 years is € 659.40, ”Dobiš clarified. However, higher interest rates are not the only problem that young people in particular have to deal with at the moment, because if they want to move on their own, they also have to find suitable real estate. Here too, however, the price has risen rapidly over the last year. While some newly built houses in satellite villages near Bratislava were able to buy for about 150,000 euros, currently the price is almost twice as high. Developers are also responding to more expensive materials, and the price of wood, steel and metals has risen recently. Photo gallery (4) Source: Getty Images It is so easy that one’s own property will be inaccessible to young people. However, whether young people will be able to afford their own housing depends more on regional differences. However, in the case of a monthly net income of EUR 1,000, the maximum mortgage limit is EUR 96,000. The maximum loan amount is calculated as eight times the average annual salary. “Whether and what you can buy for it is more a question of an offer that is in the real estate market. However, I must state that the possibilities are very limited, “said Dobiš. Therefore, in the end, he would recommend people to check the real estate they want to buy, and when choosing a fixation, he chose those for a longer period of time, ie at least 10 years. Interest rates have risen again: Are we waiting for historical highs? The analyst said it clearly, you need to prepare for THIS!