Mortgages in the Czech Republic

Planned to stay for a year and five years have already gone by? Perhaps you´re feeling it´s time to put down some roots and unpack the suitcase for good. There is no better feeling than knowing you own your own home – no need to ask for permission to change things around or wait for the landlord to get round to fixing something that has been broken since you moved in. Your former rent money can be used instead to pay for your property, an investment which is always handy to have. But how easy is it to get a mortgage? Especially if you are not married to a Czech national and still haven´t managed to master more than pub-Czech. Well, it actually isn´t as complicated as you might think.

The two easiest options are to either go to the bank yourself and apply for a mortgage or go to a mortgage broker and let them do the work for you. If you decide you want to do it yourself then most of the main banks in Prague now have comprehensive English websites, and you should be able to find English-speaking employees in the main branches to help advise you. To get a good idea of what is available check out Česká spořitelna (www.csas.cz), Komerční Banka (www.kb.cz), Československá obchodní banka (www.csob.cz) and Raiffeisen Bank (www.rb.cz). These are only a few of the banks available in the Czech Republic with which you can apply for a mortgage, for a more complete list check out the directory listing on Expats.cz.

When applying for a mortgage you will need to bring ID documents, and documentation showing both your employment and financial history, including information on any debt or further financial obligations. You will also need the mortgage loan application form, and other documents pertaining to the loan, such as a document showing the real estate you intend to purchase. If you go to a broker they will assist you with getting together all of the documents necessary for your individual situation. If you decide to go directly to a bank you can get the mortgage application form from them and they will tell you exactly which documents you will need based on your personal situation. It is possible to download the mortgage application form from the Komerční Banka website (www.kb.cz) and they also have a document which you can download that comprehensively lists all of the documents that can be used to apply for a mortgage.

Normally you should be able to get an 80-100% mortgage over a period of up to 30 or 40 years, depending on your situation. This means that the bank will lend you 80-100% of the total cost of the real estate you are purchasing. Mortgages in the Czech Republic are generally blended repayment mortgages. This means that the monthly mortgage payments are fixed, and they partly cover interest and partly principal repayment. The interest rate is fixed for a number of years at a time. For example, it may be fixed for five years at a set interest rate after which a new interest rate will be organized for another length of time based on the interest rates valid at that time.

Banks offer other types of mortgages compared to this standard mortgage. For example, Komerční Banka offers a flexible mortgage where you can decrease installments by as much as 50% or increase them by as much as 100% over the course of repayment. The start of repayment can be deferred by up to 12 months or installments can be interrupted for three months. If installments are deferred, then no payments are made on the principal or interest. But changes to the level of installments or interruption of installments can only happen once a year. With Komerční Banka you must have a current account as an individual client with them for the duration of the mortgage transaction.