In the past it has not been easy to get a mortgage loan as a foreigner in the Czech Republic. This was not just due to the high level of bureaucracy involved but also to the fact that Czechs generally disliked being in debt. This, however, has changed and mortgages are widely available now.
EU nationals and non-EU nationals with Czech residency can apply for a mortgage in the Czech Republic directly. Otherwise you need to apply for a mortgage loan through an S.R.O., a Czech limited liability company.
Most banks will only finance between 75-85% of the total real estate price; the rest has to be paid in deposit by you. The duration of mortgages varies from 5 to 25 years, usually with fixed interest rates for the first five years.
In many cases it is better to apply for a mortgage as an individual since you will receive better interest rates than through a newly established S.R.O. However if you have already had an S.R.O. with a good investment history in the Czech Republic for some years, you might well get better mortgage offers via the S.R.O.
Applying for a mortgage in the Czech Republic
If you want to apply for a mortgage loan you need to provide various documents. They include a copy of the purchase contract or of the preliminary contract and a proof of income.
The proof of income should also include the incomes of any co-applicants or guarantors. If you are an employee you'll need to prove your average income over the last three months and provide an employment contract. Self-employed people will have to use their tax return documentation from the last two years as proof of income. Don't forget to provide information about other monthly obligations, such as already existing bank loans.
Additionally, a real estate appraisal is needed. Talk to your bank about that since not every bank accepts all appraisals.
Once you have all the documents collected together, the application will usually take two weeks to process. Another five days are needed to prepare the contract.