Czech Mortgage Rates Rise for Sixth Straight Month

Average advertised mortgage rates in the Czech Republic rose to 5.51% in September 2026, reaching their highest level since the summer of 2024 and extending an increase that has now lasted six months. Rates on mortgages actually issued remain lower, averaging 5% in August. The rise in borrowing costs is coinciding with double-digit home-price growth and larger average loans, putting further pressure on housing affordability.

Czech advertised mortgage rates reach 5.51%

The Swiss Life Hypoindex rose by 0.09 percentage point in September to 5.51%. The index measures average advertised rates for mortgages with loan-to-value ratios of up to 80% and therefore reflects bank offers rather than completed loan agreements.

The index has increased by 0.62 percentage point since March, when it fell to 4.89%, its lowest level since April 2022. A model CZK 3.5 million mortgage with a 25-year maturity now produces a monthly payment of about CZK 21,520, almost CZK 1,300 more than in March. Average September rates also varied by fixation period, from 5.29% for one year and 5.27% for three years to 5.51% for five years and 5.99% for ten years on mortgages with LTVs of up to 80%.

Adalytica noted that mortgage pricing has continued to rise even though the Czech National Bank’s policy rate is well below levels seen two years ago. Fixed mortgage rates are influenced not only by the central bank’s short-term rate but also by the cost of longer-term market funding.

Rates on completed mortgages are rising as well

The average interest rate on newly issued mortgages reached 5% in August, up from 4.9% in July. This measure reflects loans that banks and building societies actually provided, making it different from the September advertised-rate index.

Banks issued CZK 26.8 billion of new mortgages excluding refinancing in August, 13% less than in July. On a seasonally adjusted basis, activity declined by about 11%. The Czech Banking Association said the slowdown partly reflected the fading of an earlier rush to secure financing before tighter investment-mortgage rules and higher market rates took full effect.

New mortgage lending reached CZK 273 billion in January through August, CZK 68 billion, or roughly one-third, more than during the same period of 2025. The average new mortgage was CZK 4.59 million, around 8% higher than a year earlier. The association’s illustrative average monthly mortgage payment stood at CZK 25,888. The spread between mortgage rates and relevant market rates remained below 0.6 percentage point in August, compared with a long-term average of around one percentage point, leaving banks with less room to absorb higher funding costs through their margins.

The central bank keeps its rate at 3.75%

On September 17, the Czech National Bank left its two-week repo rate unchanged at 3.75%. The discount rate remained at 2.75% and the Lombard rate at 4.75%. All seven board members voted for the decision.

The current repo rate has been in place since June 19, after the central bank raised it by 0.25 percentage point. At its September meeting, the bank said higher longer-term interest rates had already tightened financial conditions and should help stabilise the growth of new lending. At its next meeting, the board expects to choose between keeping rates unchanged and raising them.

This helps explain why mortgages can become more expensive without another increase in the headline policy rate. Multi-year fixed mortgages depend on banks’ longer-term funding costs as well as on the central bank’s short-term rate.

Czech house prices rise 10%

Borrowers are also facing higher property prices. In the first quarter of 2026, Czech house prices increased 10% year on year and 2% from the previous quarter. The annual increase across the European Union was 5.1%.

Czech housing has therefore continued to appreciate at almost twice the EU average. Annual growth had also remained close to 10% during the previous three quarters, at 10.5% in the second quarter of 2025, 10.8% in the third quarter and 10.3% in the fourth.

For buyers, rising prices and higher mortgage rates reinforce each other. A similar property requires a larger loan than it did a year earlier, while servicing that loan also costs more.

Prague new-build asking prices reach CZK 182,700

The affordability challenge is particularly visible in Prague. Average asking prices for available apartments in new residential projects reached CZK 182,700 per square meter in the second quarter, 1.3% higher than in the first quarter.

Prague 2 was the most expensive district in Deloitte’s dataset at CZK 265,100 per square meter after a 10% quarterly increase. Prague 10 was the least expensive at CZK 166,800. The figures cover asking prices for unsold units in development projects rather than average completed transaction prices across the capital.

At those price levels, a standard mortgage of CZK 3–4 million covers only part of the cost of many new Prague apartments, increasing the importance of the borrower’s down payment and income.

Investment mortgages face tighter rules

Since April 1, 2026, the Czech National Bank has recommended tighter limits for mortgages used to purchase investment residential property. The loan-to-value ratio should not exceed 70%, while total borrower debt should not exceed seven times annual net income.

The central bank defines an investment mortgage as financing used to acquire a third or subsequent residential property and/or a buy-to-let residential property. For owner-occupied housing, the general LTV cap remains at 80%, rising to 90% for applicants under 36.

The CNB introduced the recommendation after mortgage-market activity moved above long-term averages, residential property prices began rising at double-digit rates and the share of investment mortgages increased. The bank said these loans showed riskier characteristics than mortgages used to finance owner-occupied housing.

Mortgage activity has slowed but remains strong

The August fall in lending does not yet amount to a collapse in mortgage demand. New lending during the first eight months remains roughly one-third above the comparable 2025 level, while the average loan is 8% larger.

Borrowing was unusually strong earlier in the year as some clients moved purchases forward before the new investment-mortgage recommendations came into force and market financing costs rose further. Activity has since cooled.

The change in the direction of mortgage rates has also complicated the position of buyers who had delayed purchases in anticipation of cheaper financing. Rates have risen consistently since March, while property values have continued to increase.

As International Investment experts report, the main issue for Czech housing is the simultaneous increase in property prices, mortgage rates and average loan sizes. An unchanged Czech National Bank rate does not guarantee cheaper mortgages because lenders also depend on longer-term market funding. For buyers, the decisive figure is the final monthly payment, which depends on the purchase price, down payment, loan amount and interest rate together. If home prices continue to rise at a double-digit pace, any future decline in mortgage rates may only partly offset the higher cost of the property itself.

FAQ: Czech mortgages and property

What is the average Czech mortgage rate in September 2026?

The average advertised Swiss Life Hypoindex rate is 5.51%. The average rate on new mortgages actually issued in August was lower at 5%.

Why are there two different mortgage-rate figures?

Swiss Life Hypoindex tracks advertised bank offers at the beginning of the month. The Czech Banking Association measures rates on mortgages that have actually been issued, so the figures describe different stages of the lending process.

How much have mortgage rates increased since March?

The Swiss Life Hypoindex has risen from 4.89% in March to 5.51% in September, an increase of 0.62 percentage point.

What is the average new mortgage in the Czech Republic?

The average new mortgage was about CZK 4.59 million in August.

How quickly are Czech home prices rising?

House prices increased 10% year on year and 2% quarter on quarter in the first quarter of 2026.

How much do Prague new-build apartments cost?

The average asking price of available units in new projects reached CZK 182,700 per square meter in the second quarter. In Prague 2, the figure was CZK 265,100.

What limits apply to investment mortgages?

The Czech National Bank recommends a maximum LTV of 70% and a maximum DTI of seven times annual net income for investment residential mortgages.

Can mortgages become cheaper while home prices keep rising?

Yes. Mortgage rates and property values respond to different forces. For buyers, however, a lower future interest rate may not improve affordability if the purchase price has increased significantly in the meantime.