Coming changes of the Czech mortgage market

The Czech National Bank ("CNB") wil influence the maximum LTV (Loan to value) of the mortgages. The CNB recommends max 95% LTV from 1 October 2016 and max. 90% LTV from 1 April 2017. The true is, that this is only the recommendation, but the banks which will provide loans above this max. LTV settled by the CNB will need more capital to cover these loans. In other words these mortgages will be still available, but the conditions for clients might not be so friendly as today.

Moreover, new Act of consumer loans was agreed by parlament of the Czech Republic and it also influences the mortgages. The clients will be able to repay the 25% of the mortgage every year without any penalities or repay the whole mortgage in case of difficult life situations. This Act should be valid from October or November this year.