APPLICATION OF DSTI AND DTI MACROPRUDENTIAL POLICY LIMITS TO THE MORTGAGE MARKET IN THE CZECH REPUBLIC FOR THE YEAR 2022

Abstract

This paper deals with selected instruments of macroprudential policy, the determinant of which is the amount of the monthly net income of the mortgage applicant. In November 2021, Czech National Bank reintroduced maximum DSTI as debt service indicators and DTI as income indicators with the view to the progress of real estate market in the Czech Republic. The paper discusses which of the limits will be more decisive for mortgage applicants in the conditions of rising mortgage interest rates in 2022 after the repeated increase in the base rate by the Czech National Bank. We will find out for which interest rate the DSTI or DTI is more important and which of the limits will be entirely irrelevant for almost all mortgage applicants in 2022, even with regard to age according to the legal conditions. 

Data:
Received: 7 Jan 2022
Revised: 25 Feb 2022
Accepted: 6 Apr 2022
Published: 20 Apr 2022