Your Mortgage FAQs Answered

• Is there a kind of sanction when the loan is paid back earlier than initially planned? Currently, there are no sanctions, but starting from September 1, 2024, there will be a 0.25% penalty for each year of fixed-rate premature repayment, capped at 1%. However, clients can make an annual repayment of 25% of the mortgage amount on the contract anniversary without any fee.
  

• Is there a minimum monthly down payment? It ranges from 0-20% depending on the client's capabilities.
  

• How can I find an evaluator? The bank you choose will provide a list of accepted evaluators with whom they collaborate.
  

• Can foreigners buy property in the Czech Republic? For EU citizens with income in the Czech Republic, obtaining a mortgage is not a problem. Non-EU citizens face varying conditions across banks; some banks accommodate them, while others may require long-term residency and a 3-year work history in the Czech Republic.
  

• How long does it take to get the mortgage? If there's no waiting involved, it takes 2-3 weeks from the first meeting to fund disbursement.
  

• Is there any initial deposit required when asking for a mortgage loan? In the Czech Republic, the minimum down payment is 10% for individuals under 36 and 20% for those over 36. There are options to address this issue, such as using other properties as collateral.
  

• Which lifetime/maturity should be chosen? It depends on the client's financial plan. Longer terms mean smaller payments. The loan term and overall mortgage structure can be adjusted over time to save money and pay off the mortgage sooner.
  

• Is it advantageous to buy an old or new flat/house? It depends on individual preferences. New constructions tend to appreciate more, but the initial cost is higher. Older properties may have repair costs, especially for houses.
  

• What is important to know when financing a flat or a house with a mortgage loan? It's a significant commitment that doesn't necessarily mean paying a large installment for 30 years. Approach it responsibly, seek advice from experts, consider how the mortgage fits into your overall financial picture, and choose a suitable strategy.
  

• Does the property always have to be taken as collateral when being financed through a mortgage loan? In the case of a mortgage, the property must always serve as collateral. However, there are ways to buy or renovate a property without collateral, and it's possible to use a different property as security.
  

• What is the maximum lifetime of a mortgage loan (term of loan)? The maximum repayment period for a mortgage is 30 years, up to the age of 70. If there are two applicants and one is over 40, under certain conditions, the repayment period can be adjusted based on the younger applicant.
  

• What documents are needed for applying for a mortgage loan? If it's a purchase, you'll need the purchase agreement, attorney escrow (if applicable), income confirmation from the employer on the bank's form, and possibly tax returns for entrepreneurs. For construction, additional documentation like project plans and confirmation that it's a building plot ("územní plánování") may be required.
  

Please note that a mortgage loan is a highly personalized financial product, and an in-person consultation is always beneficial. Let me know if you have any other question or book free 30-minute initial meeting.