In short, yes.
Mortgages are granted to foreign residents by local banks via an established SRO, (Czech limited liability company) or as an individual if you have a Czech residency.
Currently there are only two banks who are willing to lend to foreigners who don’t have a Czech residency and earn income in the Czech Republic.
There are many banks offering mortgages but options are limited for foreigners.
Also, the terms and conditions are much different for those who would use the property for their private residence versus an investment property. Banks are much more willing to lend to someone who will be using the property for themselves.
For individuals, 85% mortgages are currently possible for those with good, provable income.
As well, banks can use potential income from a property toward proving necessary funds to cover a mortgage, however, each bank calculates this differently and there is often a interest rate penalty for doing this.
Here are the general terms for getting a mortgage in Czech Republic:
1. The amount lent will not exceed 85% of the maximum value of the property, as valued by the bank’s own property evaluation firm.
2. The borrower must invest their own funds at a minimum level of 15% of the maximum value of the property, et. al.
3. The maximum lending period cannot exceed 25 years and in most cases, 20 years.
4. The interest rate is fixed for a range of 1 to 5 years, after which it is recalculated by the lender. A so-called ‘floating’ rate which fluctuates in connection with the Czech National Bank’s base rate is very hard to find.
5. Interest rates currently range from 3-6% per annum. The most risk free borrowers in the eyes of a bank (ie. employed for a long time, Czech resident or citizen and using the property for personal living) get the best rates.
Download and complete our mortgage pre-score form (Word or PDF) and email it to me at [email protected] for your free mortgage assessment.
|
Are you thinking about investing in Czech real estate or buying a personal property?
Don’t make the same mistakes hundreds of other investors have made! Be informed by buying our book: “CZECH POINT – Keys to Lucrative Property Investment” for a complete guide to investing in residential property. Chapter 21 of the book discusses how to obtain a mortgage in Czech Republic. |
   |
Updated/Aktualizováno: December 8, 2014,
