All banks monitor the loan to value (LTV) ratio, which measures the amount of the loan and the value of the mortgaged property. The Czech National Bank (CNB) recommends that you should not get a mortgage above 90% LTV. Mortgages above 80% LTV are also offered to a limited extent, as banks can only provide 15% of these. So if you are thinking of financing your own home with a mortgage, you should have at least 25% of the purchase price of the property saved.
You should also take into account that the bank does not base the value of the mortgaged property on the market price, but on an expert’s report. These two values may differ by more than 10%. In addition to the difference between the purchase price and the appraisal price of the property, you should also expect to pay 4% real estate acquisition tax and commission to the real estate broker in advance.
TIP: A combination of a mortgage and a building society loan can finance 100% of the value of the property. Our mortgage specialists can advise you on how best to use a mortgage and building society to raise the necessary amount to buy your property.