LTV and DSTI: The Key Parameters That Determine Whether You Can Get a Mortgage in Prague
How Mortgage Applications Are Assessed in Prague
Getting a mortgage in Prague does not depend solely on your salary or the price of the property. Czech banks mainly assess the relationship between the requested loan, the value of the property and the applicant’s ability to repay the monthly instalments over time.
Two of the most important indicators are the Loan-to-Value ratio (LTV) and the Debt Service-to-Income ratio (DSTI). The rules are set at national level, meaning that Prague does not have separate mortgage limits. However, higher property prices in the Czech capital make these parameters particularly important for prospective buyers.
In 2026, the Czech National Bank continues to apply a binding LTV limit, while the general DSTI and DTI limits remain deactivated. Banks nevertheless continue to calculate these ratios as part of their internal creditworthiness assessments.
LTV: How Much Own Capital You Need
The Loan-to-Value ratio indicates what percentage of the property’s value is financed by the bank.
The formula is:
LTV = mortgage amount / value of the property used as collateral × 100
For the purchase of an owner-occupied residential property, the general LTV limit is 80%. This means that buyers must normally finance at least 20% of the property’s value using their own funds.
For example, if an apartment is valued at CZK 10,000,000, the standard maximum mortgage would be approximately CZK 8,000,000. The buyer would therefore need to provide at least CZK 2,000,000, in addition to the other costs connected with the transaction.
For applicants under the age of 36 purchasing a property for their own residence, the LTV limit may increase to 90%. In the same example, the mortgage could therefore reach CZK 9,000,000.
The bank uses the value established by its own property appraisal. If the bank’s valuation is lower than the purchase price agreed with the seller, the amount of own capital required will increase.
DSTI: How Much of Your Income Goes Towards Debt Repayments
The Debt Service-to-Income ratio measures the relationship between all the applicant’s monthly debt repayments and their monthly net income.
The formula is:
DSTI = total monthly debt repayments / monthly net income × 100
An applicant with a monthly net income of CZK 80,000, a future mortgage payment of CZK 32,000 and a car loan payment of CZK 5,000 would have a DSTI ratio of 46.25%.
There is currently no general binding DSTI limit imposed by the Czech National Bank. However, this does not mean that the ratio is irrelevant. Each bank applies its own internal thresholds and also evaluates household expenses, dependants, credit cards, existing loans, the mortgage term and the possible impact of future interest-rate increases.
Stricter Rules for Investment Properties
Since 1 April 2026, the Czech National Bank has recommended stricter lending conditions for mortgages used to purchase rental properties and for the acquisition of a third or subsequent residential property.
In these cases, banks should apply a maximum LTV of 70% and a maximum DTI of 7, calculated by comparing the applicant’s total debt with their annual net income.
For a property valued at CZK 10,000,000, the buyer may therefore need to provide at least CZK 3,000,000 from their own resources.
Before searching for an apartment in Prague, prospective buyers should calculate not only the monthly mortgage payment they can afford, but also the LTV ratio based on the bank’s potential property valuation. A sufficient income does not always compensate for a low deposit, while substantial savings do not guarantee mortgage approval when debt repayments place excessive pressure on the household budget.
