Engel & Völkers Licence Partner E&V Commercial Prague > Blog > Mortgage terms and conditions have become stricter – how does this affect investing in real estate?

Mortgage terms and conditions have become stricter – how does this affect investing in real estate?

The rapid growth in property prices and the large volume of outstanding mortgages on the Czech market has led the ČNB (Czech National Bank) to tighten the conditions under which people can obtain a home-buyers loan. How has this intervention affected investment in real estate? And what can we expect the future to bring? Let’s take a look at the answers together in our article here.

The Czech Banking Association (ČBA) commissioned the market- and sociological-research firm SC&C to do a survey of the rate and total volume of the Czech population’s mortgate debt, and results showed that roughly every fourth Czech is currently repaying mortgage debt. The total combined amount owed by the Czech population is a whopping 1.2 trillion crowns (1,000,000,000,000,000,000 CZK). In order to eliminate possible problems resulting from inability to repay the debt for both banks and home owners, the ČNB has come up with several substantial changes to protect banks from debtors, and debtors from excessive debt. At the same time, the ČNB wants to fight the rapid rise in real estate prices on the Czech market (last year, this rise was the highest in the EU).

A mortgage law does not exist: the ČNB’s restrictions are only recommendations

In October 2018, the Czech National Bank tightened its rules regarding who is eligible for a mortgage loan, and under what conditions.  Income level requirements were raised, and base interest rates went up by .25% for the fourth time this year to a total of 1.75%:  the total increase in 2018 was thus a whole percentage point.

And while the newly imposed restrictions by the ČNB are merely recommendations, banks are indeed largely following them, and a large majority of them have already adjusted their existing products accordingly.

What are the new mortgage guidelines?

  • The applicant’s mortgage debt must not exceed 9 times their annual net income.

  • Applicants must not spend more than a maximum of 45% of their net monthly income on debt repayment.


What has not changed?

  • You can still take a mortgage of up to 80% (some banks exceptionally allow up to 90%) of the total property value.


  • People between 18 and 65 years of age (exceptionally up to 70 years of age) are eligible to take out a loan.

 Prague
- Hypotéky zpřísnily. Mění se investování do nemovitostí?

Očekává se, že až třetina domácností na hypotéku nedosáhne

Odhady toho, jak se změny z dlouhodobého hlediska promítnou do situace na realitním trhu, se různí. Většina z nich předpokládá lehké ochlazení z důvodu snížení množství schválených žadatelů o úvěr. Z dlouhodobého hlediska jsou ale úrokové sazby stále poměrně nízké. Například v roce 2008 byly až na hodnotě 5,82 %. Nepředpokládá se proto, že by nemovitosti výrazně zlevnily a nabídka převýšila poptávku – zvláště v Praze a větších městech.

Odborníci také předpokládají, že na bydlení nově nedosáhne přibližně 30 % rodin. Z analýzy, kterou vypracovala Česká bankovní asociace spolu bankami, vyplývá, že jenom v roce 2017 by za nových podmínek nedosáhla na hypotéku pětina žadatelů. Každá třetí žádost by tak mohla být zamítnutá.

Z hlediska investic do nemovitostí je situace stále příznivá

Na pražském trhu nemovitostí se nepředpokládají žádné skokové změny. Výrazný převis poptávky nad nabídkou, utlumená výstavba a velký zájem z řad investorů způsobují, že se změny z hlediska čerpání hypoték v oblasti investování do nemovitostí příliš neprojeví. Zvláště u novostaveb roste podíl investorů, kteří kupují nemovitost za účelem následného pronájmu a hypotéku čerpají jen výjimečně.

Pokud tak plánujete koupi bytu či domu, zjistěte si, zda splňujete základní požadavky, a klidně si vybírejte z nabídky nemovitostí – úrokové sazby jsou stále příznivé i po říjnových změnách.

Pokud nemovitosti prodáváte či pronajímáte, ani pro vás se situace příliš nemění. Předběžné odhady předpokládají, že se ceny nájmů budou v souvislosti se změnami dokonce zvyšovat. Dobře ale vždy zvažte, do které nemovitosti konkrétně investujete.

Contact us now
Engel & Völkers
Licence Partner E&V Commercial Prague
  • Janáčkovo nábřeží 1101/23
    150 00 Prague
    Czech republic

We know the true value of your property

Do you know how much your property is currently worth? No matter if you just want to inform yourself about the current market-price, or if you wish to sell your property for the best price: our experienced marketing experts are happy to assist you with a free and non-binding valuation.

Follow us on social media

Real Estate as Capital Investment – Engel & Völkers Commercial negotiates terms of rental and buying/selling of domestic and commercial buildings for private consultants and institutional investors 

With our nationwide network of over 50 commercial offices across Germany, our expert consultants find the ideal location for domestic property and buildings for all business requirements – the ideal real estate for your investment! Proprietors appreciate our market knowledge and our numerous listed buyers. This means we can negotiate the term of your asset straight to an interested party and with a market orientated price. 

If it comes to reliable and correct estimation of value and potential of your investment asset  - you should count on the competence of  our experts! With Engel & Völkers Commercial – you can take advantage not just of comprehensive knowledge, but also on unique local presence. Our local based experts know the individual markets very well and give you the best advice  and target orientated recommendations to increase the value of your asset by using a detailed analysis of location and comparison to similar properties. Above all, we make sure that your real estate  gets noticed by the most attractive circle of interested clients. Thanks to our nationwide network, we maintain contacts  with wealthy private investors and we  work every day with privileged clients. Last,but not least – you can take advantage of our wide range of exclusive marketing tools: The best way to find your ideal buyer quickly  for your property with the best possible conditions - using a targeted marketing strategy! 

With an individual consultation by our expert consultants – you will have already made the first step on the way to a profitable Real Estate Investment. After collecting all the  relevant facts from planning your property and profit expectation to your volume of investment – we thoroughly go through our complete and extensive portfolio depending on your guidelines and targets. Our nationwide presence at all relevant economic locations and our superiority in terms of information available to, and knowledge of our experts, are most helpful.  The most interesting perspectives resulting not from an isolated view of the particular asset, but from the consideration of the surroundings, the investment conditions, and also a reliable assessment of value and potential for development. Naturally, we are on your side, in the process of bidding and signing of an agreement or contract, financing, tax obligation,property management or notaries. You are always involved and at the same time relieved as much as possible to make the most from attractive  chances without unnecessary distractions.

Our services for private or institutional Owner or Investors

-        Sales of private and commercial buildings

-        search for ideal investment real estate

-        Sales of Portfolios tosingle investors or companies

-        Real Estate estimationand assessment of market prices

-        Access to wealthy private and corporate clients