The first bank raises mortgage interest rate

Other banks may follow soon.

Illustrative stock photoIllustrative stock photo(Source: Sme)

After several months of decreasing the interest rates on mortgages and home loans to attract more clients, UniCredit Bank decided to increase the rates as of December, as the first bank in Slovakia. It is possible that more banks will follow, the Sme daily reported.

UniCredit increased the rates at loans with five-, seven- and 10-year fixation periods (to 1.39 percent, 1.69 percent and 1.89 percent, respectively), while the rate will not change in case of three-year fixation period (1.19 percent). The conditions for loans will remain the same.

The bank explains the increase with the situation in the world.

Read also:Loans will be limited

“The gradual increase in interest rates with long fixation periods can be expected next year, regardless of the outcome of the US elections,” said UniCredit Bank’s spokesperson Zuzana Ďuďáková, as quoted by Sme, adding that the current developments have only accelerated the change.

As inflation in the eurozone will gradually start recovering, Ďuďáková expects that the interest rates for longer fixations will increase also in other banks.

She rejects the claim, however, that the increase in interest rates pertains to stricter rules for obtaining a mortgage prepared by the National Bank of Slovakia, the country’s central bank, which will come into force next March.

“The step of UniCredit Bank is probably a signal that we are at the end of the drop in interest rates and that we can expect stagnation or increase in interest rates in some banks,” Maroš Ovčarik from Finančný Kompas website told Sme.

Other banks did not want to comment on the potential increase in interest rates.

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