Mortgages in the Czech Republic: Why Rates Will Rise in 2026 and What You Should Do Now to Save Money

A Clearly Foreseen Rise in Mortgage Rates

In 2026, mortgages in the Czech Republic will become more expensive. This is a scenario that industry experts now consider almost certain and one that affects both existing homeowners and those planning to buy property. Banks are preparing to raise interest rates, driven by higher funding costs on financial markets and new rules introduced by the Czech National Bank (CNB). The result will be a further increase in the cost of homeownership, after several already challenging years for buyers. Taking action now, in the coming months, can make the difference between an affordable mortgage and a significantly higher monthly payment.

The End of Ultra-Low Mortgages From the Past

Tens of thousands of Czech households that locked in rates below 2% in 2020 and 2021 will soon face far less attractive offers when their fixed-rate periods expire. In 2026, without an early refinancing or a new mortgage, the cost of borrowing will rise sharply. Today, average mortgage rates are around 4.9%, but forecasts suggest an increase of several tenths of a percentage point next year. The main reason is the higher cost of funds for banks, which has reached a two-year high.

Gradual but Unavoidable Increases

Despite the challenging outlook, there is a partial note of reassurance. Strong competition among banks is expected to prevent sudden or dramatic rate hikes. Experts anticipate a gradual increase, estimated at around 0.4% points during 2026. However, this does not mean the impact will be negligible. Even small increases, when applied to long-term mortgages, can translate into thousands of euros in additional repayments. For this reason, anyone considering a mortgage or refinancing should act carefully and with the right timing.

Stricter Rules for Property Investors

Starting in April, tighter conditions will also apply to property investors.

• Anyone purchasing a third home or buying a property solely for rental purposes will be required to make a higher down payment, as banks will be allowed to finance only up to 70% of the property’s value.
• In addition, total debt must not exceed seven times the applicant’s net annual income.

The CNB says the measures are intended to reduce risks in a rapidly expanding segment and to cool an increasingly expensive housing market. However, many analysts believe these steps will have limited impact on prices, which are mainly driven by a shortage of supply and slow construction of new homes.

What to Do Now to Pay Less Later

Experts’ advice is clear: act sooner rather than later. This is especially important for homeowners whose fixed-rate periods expire in 2026. Negotiating with banks well in advance, even six months before the end of the fixed term, can lead to better conditions. Showing active interest and presenting competing offers is often the most effective way to secure a lower rate. At present, three-year fixed-rate mortgages are considered the most attractive option, offering a balance between security and flexibility. With rates unlikely to fall in the near term, delaying decisions could prove costly. Acting now means protecting your household budget in the years ahead.

Source: expats.cz