Note 1: This article was written in April, 2010 and the requirements and eligible banks have changed considerably since then. For the most up-to-date information please write us at info@czechpoint101.com for a free mortgage assessment and advice.
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Note 2: This article is regarding mortgages to foreigners for the purpose of an investment property. Properties purchased for personal use fall under a different set of rules.

As the theme reads, it is currently a real battle to get a good mortgage with all the factors an investor wants including an acceptable interest rate, LTV, repayment length and reasonable conditions. It is not possible to apply to the bank and have it approved without a sometimes very painful process of getting the documents translated, notarized and verified.

Let’s have a closer look to the Czech mortgage providers and let’s see what they can offer to foreigners who are purchasing an investment property in Czech Republic:

1) Hypotecní banka (HB) – they currently offer mortgages for investment properties.

The LTV is 85%, nevertheless they are using coefficient 0.95% to all valuations, which means that if you are able to get maximum LTV, then you can get a real 80%LTV. Truth is that the bank valuation is almost never the same as the purchase price, which means that you could possibly get a mortgage somewhere between 70-80 % of the purchase price.

The current interest rate is around 5.99% for 3 years and the bank generally does not want to negotiate about it. The disadvantage is that the length of the mortgage is only 20 years until the applicant reaches their 65 birthday – which makes the cash – flow a little bit negative except on exceptional purchases. Also this bank doesn’t accept the income from dividends.

The advantage is that even though that they are trying to do only the most secure mortgages, they are still accepting foreign investors and they do not required any kind of residency permit or visas. The whole process could take around 2 weeks, which is excellent. The bank is good for those that are willing to put around 20-25% of the purchase price in cash.

2) Raiffeisenbank (RB) – they currently offer mortgages for investment property, too.

The LTV is between 75% – 80%, with the interest rate around 6%, length max. 30 years till 70 years old. However, they are providing the mortgage for rentals only to those that are living in Czech Republic for at least 2 years and that have an income from Czech Republic or an income sent to the account in the Czech Republic. So if you are a foreigner and want to buy a property in Czech, this bank won’t be your best choice unless you can prove that you are living here through phone statements, utility statements and unless you are satisfied with sending your salary to a Czech Republic bank account. Overall, this bank offers a very good quality and predictable service.

This bank also doesn’t require any kind of residency permit or visa, nevertheless, by requiring that you have to live here at least 2 years, the bank de facto push you to have one. The bank is good for those that are living and working in the Czech Republic.

3) Oberbank (OB) – offer mortgages for investment purposes but only really an option if you live in a country where they have a branch.

They are offering 85% LTV and great possibility to make a unique (to Czech Republic) so-called PRIBOR or floating interest rate, where the fixation period is only 3 months and interest rate between 4.2 – 4.6%.

Their main business is not providing mortgages, so they are little bit inexperienced with providing a mortgage for foreigners from different countries than where they currently have a branch (Germany, Austria, Czech,…). Because of this, it can be a really painful process when someone from, for example, the UK applies for a mortgage. If he is not living in Czech Republic, then the bank ask for many other documents and, in the end, the result is not sure. The whole process could take even longer than one month due the approval time required by the office in Prague to whom the application is sent. Nevertheless it is one of the small numbers of the banks that offer also mortgages in EURO and definitely in the EURO field would be one of the best ones.

This bank is good only if you are the citizen from the countries where they have a branch.

4) Komercní banka – They currently do not provide mortgages for foreigners for the purpose of investment.

5) CSOB – they have similar conditions as the HB bank, nevertheless the process is more bureaucratic and sometimes they have very long processing times before a decision is received.

6) LBBW – a possibility for those with high income, residency permit and a premium property

LBBW is a new dynamic bank that offers 80% LTV for 1 flat and for more than 1 they offer 70% LTV, but the applicant’s income must be more then 50 000 CZK in order to get the mortgage. The interest rate is between 5 and 6% and they require some kind of residency permit or visas. The bank is doing only “good deal” mortgages, which means good client, good property, and minimal risk for them.

The Czech market has more banks than I mentioned above, but the lending criteria of the others are not very open for foreigners who are looking for a property as an investment. All together we can say that currently the best option for a classic investor (I mean those that are not living in the Czech, not having an income from Czech and do not have any kind of residency) would be HB as all the other banks usually have some “BUT” in their lending criteria.


For those that are living here, I would propose to try HB, RB or LBBW as they can offer similar conditions, but could be different from project to project.

If you need more specific information please contact us or your bank adviser.

Written by Pavel Parizek in our Brno office.

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