CNB abolishes DSTI limit for mortgages

(ČIA) The Czech National Bank (CNB) confirmed the setting of the LTV indicator limit of 90% for mortgages and abolished the DSTI indicator limit. The CNB reduced the countercyclical capital buffer rate of banks to 0.5% with effect from July 1, 2020 from the current level of 1.0%. The CNB is prepared to fully release the countercyclical capital buffer in the event of a significant increase in banks' credit losses. In the Financial Stability Report 2019/2020, the CNB stated that the overvaluation of house prices at the end of 2019 was estimated at 15–25%. The coronavirus crisis has not yet had a significant effect on residential property prices. However, due to unfavourable developments in the real economy, there is potential for a decline in the coming quarters.



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