Getting a Mortgage in the Czech Republic as a Foreigner: Complete Guide 2025

Mortgages for Foreigners: A Market in Evolution

Obtaining a mortgage in the Czech Republic as a foreigner is possible both for purchasing residential and commercial properties. The year 2025 represents a particularly favorable time for potential buyers:

• The Czech National Bank (CNB) has relaxed several conditions, allowing banks to offer financing up to 90% of the property’s value and removing the previous limit that prevented loans exceeding nine times the applicant’s net annual income.
• Interest rates are also competitive, thanks to the repo rate set at 3.75%, and many procedures, such as initiating the application and the property appraisal, are currently free of charge.

However, for foreign citizens, access to credit remains more challenging, as each bank applies its own evaluation criteria, potentially resulting in significant differences between institutions.

Age, Residency, and Required Documentation

The first requirement for obtaining a mortgage is age: applicants must be at least 18 years old, while the maximum age limit varies according to the internal policies of each bank. Generally, repayment must be completed between ages 67 and 70, making it difficult to access credit during retirement. Another key factor is residency: a mortgage application typically requires temporary, long-term, or permanent permits. For EU citizens, temporary residency is often sufficient, while non-EU citizens frequently need a permanent permit. In specific cases, especially for EU workers, it is possible to apply even without a permit, provided the applicant has a Czech address and a local identification number (rodné číslo). Every application also requires a set of essential documents, including proof of income, personal information, and documentation related to the property being financed.

Financial Stability, Creditworthiness, and Risk Limits

The applicant’s financial situation plays a decisive role. Banks assess the ability to sustain monthly payments based on the requested amount, mortgage duration, and applied interest rates. A minimum down payment of 10% is required, although 20% significantly increases the likelihood of approval. Recognized income sources include salaries from employment, business income, pensions, current or future rental income, family allowances, and other contributions. Credit history checks are also performed: late payments, unused credit cards, or ongoing debts can negatively affect the evaluation. Absence from debtor registers over the last 3–5 years is an essential requirement. Nationality also influences the assessment: applicants from EU/EEA countries are considered low risk, while those from countries with higher risk ratings may face stricter criteria.

DTI, DSTI Limits, and Collateral Valuation

Since April 1, 2022, precise rules apply to mortgage lending: the loan amount cannot exceed 8.5 times the net annual income (9.5 times for applicants under 36), and the installment cannot exceed 45% of net monthly income (50% for applicants under 36). Banks may finance up to 80% of the property value, rising to 90% for applicants under 36. Collateral valuation is crucial: the higher the value of the properties offered as security, the greater the financing that can be granted. The appraisal takes one to three months and determines the basis for calculating the mortgage. Pre-approval is also possible without having chosen a property yet, but it is valid for a maximum of three months.

The Role of Brokers and Tips for Foreigners

For many foreigners, the most practical solution is to work with a mortgage broker. These professionals act as a bridge between the client and multiple financial institutions, often offering more favorable conditions and providing language and legal support. Brokers receive a commission from the bank, not the client, but those seeking a mortgage should remain cautious: some additional services may be expensive and not always necessary. Therefore, it is advisable to compare offers, independently evaluate insurance or other fees, and primarily use a broker to negotiate rates and facilitate loan approval.

Source: https://www.pexpats.com/