Five years ago, Slovakia belonged to the five eurozone countries with the most expensive mortgages, but the current situation is much different. Banking clients in Slovakia now obtain some of the cheapest home loans.
The only countries with cheaper one- to five-year fixation mortgages at the end of last year were Germany, France, Austria, Finland and Luxembourg, the Trend weekly reported on its website in mid-February.
Though the historically lowest interest rates across Europe could motivate people to take home loans with longer fixation periods, the opposite is true. In the majority of these countries people prefer variable rates, according to the European Mortgage Federation. This includes Austria, Finland and Luxembourg where the loans were cheaper than in Slovakia, including for fixed-rate mortgages.
Concerning variable rates, Finland offers better credit terms, amounting to slightly more than 1 percent, Trend reported, referring to the data of the European Central Bank.
It is notable that in Germany and France, where an ordinary mortgage is fixed for more than 10 years or for the entire period of the loan, clients get lower interest rates than Slovaks. While the interest rate for one- to five-year fixation periods amounted to 1.78 percent in Slovakia, in Germany the interest rate on a fixed mortgage for more than 10 years amounted to 1.73 percent, according to Trend.
The average interest rate for one- to five-year fixation periods in Slovakia was 0.1 percentage point lower than the eurozone average. Slovakia came in under this threshold last year, when the interest rates for mortgages fell by nearly 0.6 percentage points; the second steepest drop in the eurozone.
Regarding all fixations, the average interest rate for mortgages in Slovakia was slightly higher, amounting to 1.86 percent in average, Trend reported.