The amount of net monthly income is one of the main parameters the bank looks at when assessing a mortgage loan application. Generally, the higher your net income, the higher the mortgage you can get.
When assessing mortgage applications, banks take into account the Česká národní banka recommendations on income-to-debt ratios (DTI and DSTI). To obtain a mortgage, both ratios must be met simultaneously. In order to pass the DTI (Debt To Income) ratio, the sum of all your existing debts must not exceed nine times your net annual income.
For example, if you earn CZK 25,000 net per month in your job and you have no other credit or loan, you can get a mortgage of up to CZK 2.7 million. To meet the DSTI (Debt Service To Income), the total of all your monthly loan repayments must not exceed 45% of your net monthly income. For a net income of CZK 25,000, the maximum monthly mortgage and other loan repayments can be CZK 11,250.
