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Summary of Changes in the Czech Mortgage Regulations

New important changes were made in mortgages due to the Czech National Bank (CNB) regulations in the last three years. The CNB wants to slow down increasing prices in the real estate market that can be observed mainly since 2017. One of the tools the CNB wants to use is mortgages. The CNB now strictly recommends all mortgage banks in the Czech Republic to reduce the maximum loan-to-value (LTV) parameter for all new mortgages.

Since April 2017 the maximum loan-to-value level has been 90 %. Interest rates for mortgages with the LTV level of 80–90 % are higher (about 0.5–1.0 %) than mortgage with the LTV level under 80 %. In addition, since  October 2018 banks have been allowed to provide mortgages with maximum monthly instalments of 45 % of your net monthly income (DSTI, debt service-to-income) and, at the same time, the value of all your loans including  credit cards may not exceed the total of 9 yearly net incomes (DTI, debt-to-income).

There’s still a chance to finance the rest of the price by means of a building savings loan called „úvěr ze stavebního spoření“. Special loans are provided by Czech savings loan institutions such as Modrá pyramida, Českomoravská stavební spořitelna, Wüstenrot stavební spořitelna, Stavební spořitelna České Spořitelny or Raiffeisen stavební spořitelna. You can get this loan up to 800 000 CZK without a collateral and even without having a previous building savings contract.

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