An American mortgage in 2026: what banks lend and what it costs

An American mortgage (americká hypotéka) is a non-purpose loan secured by a lien on a property you already own, and you can spend the money on anything. On six banks' websites (19 Oct 2026) the usual ceiling is 70 % of the valuation and 20 years; mBank lends up to 75 % over 25 years, Fio up to 80 % over 30. The rate is higher than on a purpose-bound mortgage, and interest is tax-deductible only on the part spent on housing.

Compared with a consumer loan it is cheaper and longer, which is both its advantage and its trap: stretched over 15 years it can cost more in interest than a dearer loan repaid in eight. If you stop paying, the bank can sell the pledged property.

What is an American mortgage, and how does it differ from a standard one?

It is a non-purpose loan secured by a lien (zástavní právo) on property. It differs from a standard, purpose-bound mortgage in that you need not spend the money on housing, which is why it tends to be dearer and shorter, and carries only a limited tax deduction.

Rates on American mortgages vary between banks more than on standard mortgages, and not every bank offers them. For a non-purpose loan always compare the APRC (RPSN) and the total cost.

How much do banks lend on an American mortgage, and for how long?

The ceiling comes from the ČNB and from each bank separately. The ČNB has set a binding LTV limit of 80 % of the value of residential property, and every consumer loan secured on the same property counts towards it. Most banks set a lower ceiling for the American mortgage, as the table shows, taken from their websites on 19 Oct 2026.

These are ceilings, not an offer: the bank sets the share, the rate and the term from your income and the type and condition of the property. For ČSOB and other banks, check the terms in the offer itself, because we did not verify them on the websites. We track rates on purpose-bound mortgages in the mortgage comparison. Banks quote American mortgage rates only as “from”, and you get a specific figure according to your creditworthiness and the property.

Take a flat worth CZK 5,000,000 with a CZK 2,000,000 mortgage on it. Up to the ČNB's 80 % limit there is still CZK 2,000,000 to borrow, but up to a bank's 70 % ceiling only CZK 1,500,000, if the bank counts the existing debt towards its ceiling. Ask about that before you apply.

Why banks and the ČNB lend less than on a standard mortgage

The bank cannot see where the money goes, and there is no newly bought property behind it. Its risk is higher, so it wants a higher rate and lends a smaller share of the collateral's value.

According to its official notice of 27 Nov 2025, the ČNB recommends that banks, from 1 Apr 2026 at the latest, prudently assume that a non-purpose loan secured by residential property serves an investment purpose.

The exception applies only when a detailed assessment clearly shows that the money will not go towards buying residential property as an investment. For such loans the ČNB recommends an LTV of at most 70 % and a DTI of 7, but these are recommendations, not binding limits.

In practice this means that with a debt-free flat worth CZK 5,000,000 you may not get more than CZK 3,500,000, even though the limit for housing would allow more. If you show the bank what the money is for, say a consolidation or a renovation, you usually negotiate from a better position.

Do I have to prove my income and the purpose?

You need not prove the purpose, but you do need to prove your income. The bank must check your creditworthiness thoroughly and may lend only if there is no reasonable doubt that you will repay (Act No. 257/2016 Coll., § 86(1)). If it lends anyway, the contract is invalid, though you still have to return the principal (§ 87). Komerční banka asks for two identity documents and proof of income, or a tax return with proof that the tax was paid.

Loans that are low against the value of the collateral get lighter requirements: on an American mortgage of up to 50 % of the property's value, mBank asks only for an account statement, though you must still have a steady income. Without income the law allows lending only where the loan is repaid not from income but from the sale of assets, or where the financial situation shows it can be repaid without income (§ 86(2)). Such offers come mainly from non-bank lenders and tend to be dearer, as the section on non-bank offers shows. The topic is covered in detail in a mortgage without proof of income.

Banks usually reject a negative entry in the credit registers (BRKI, NRKI, SOLUS). What to do about it is covered in a mortgage with a negative credit record.

How much does an American mortgage of CZK 1 million cost?

Assume a rate of 6.00 %. An American mortgage of CZK 1,000,000 then costs CZK 11,102 a month over 10 years, CZK 8,439 over 15 years and CZK 7,164 over 20 years. The 6.00 % is an assumption, not a market price: banks price non-purpose mortgages individually and above purpose-bound ones, which averaged 5.00 % in August 2026 (ČBA Hypomonitor).

A longer term lowers the payment but raises the interest: on a million you pay CZK 332,000 in interest over 10 years and CZK 719,000 over 20. A rise in the rate of one percentage point, from 6 to 7 %, costs about CZK 590 a month and CZK 141,000 over the whole term on a million over 20 years.

Add the valuation, the registration of the lien and its later deletion, around CZK 9,000 in total. For a different amount or term you can work out an American mortgage in the calculator; the link opens it with a CZK 1,000,000 loan over 15 years at 6.00 %.

Is an American mortgage cheaper than a loan? An example on CZK 800,000

Merging loans follows the same logic, and the detailed calculation is in Consolidating loans into a mortgage. How the two products differ in consumer rights is summed up in Mortgage or personal loan.

Can the interest on such a loan be deducted from tax?

Only in part. The deduction under § 15(3) of the Czech Income Taxes Act covers interest on a mortgage from a bank, or on a loan from a building society, that is used to finance housing needs. So what counts is what the money actually went on. On an American mortgage you can deduct the interest on the part you document with invoices for housing, for example the renovation of your own flat.

Money for a car or a holiday does not qualify, nor does buying out a sibling's share of an inherited cottage. Buying out a co-heir of a flat or house you live in does count as a housing need under § 4b(1)(f) of the Income Taxes Act.

The limit is CZK 150,000 of interest a year for a housing need acquired from 1 Jan 2021, and CZK 300,000 for one acquired earlier (§ 15(4)). At a 15 % tax rate, every CZK 100,000 of documented interest saves CZK 15,000. A non-bank loan carries no deduction, because the law mentions only banks and building societies.

How much does early repayment of a non-purpose loan cost?

The bank may claim only reasonably incurred costs (§ 117(2)) and at most 1 % of the amount repaid; if no more than a year of the agreed term remains, at most 0.5 %. It can never be more than the interest you would pay until the end of the fixation. The graduated ceiling of 0.25 % per started year, which applies to purpose-bound mortgages, does not apply to an American mortgage.

The basis is § 117(4) of the Consumer Credit Act. An American mortgage is a housing loan under § 2(2)(a), because it is secured on property even though the money does not go on housing. If you use the loan partly for housing, the predominant purpose decides (§ 2(5)).

Repayment is free here too: at the end of the fixation, up to 25 % of the original loan in the month before the anniversary, or on a sale of the property 24 months after signing. Banks also offer looser terms: MONETA states that up to 50 % of the amount borrowed can be repaid free every year after the first year of repayment, and mBank's American mortgage page states extra repayments of up to 25 % of the loan a year. The full rules, with an example, are in the article on early repayment of a mortgage.

When it makes sense and when it doesn't

It makes sense when:

• you are paying off expensive loans and use the lower rate to clear them faster, not to lower the payment,
• you need a larger sum for a one-off expense and have a clear plan to repay it,
• you are buying property abroad and pledge the one you own in Czechia; that route is described in Mortgage for a property abroad.

It does not make sense when:

• you are buying or renovating your home, because a purpose-bound mortgage is cheaper and you can deduct its interest,
• you want money “just in case” with no concrete plan,
• you are financing consumption, such as a holiday or a car that loses value faster than you pay it off,
• you want to finance a business. Komerční banka and Česká spořitelna both exclude business use of their American mortgages. A self-employed person (OSVČ) can still be the applicant, with income documented by the tax return; see a mortgage for the self-employed.

Non-bank offers and what they cost

A loan secured on property can also be provided to a consumer by a non-bank company, but only one with a ČNB licence, which you can check in the JERRS list. Milder conditions are paid for in price. An illustration with assumed rates, not market statistics: CZK 1,500,000 over 15 years comes to CZK 11,862 a month at 5.00 % (APRC 5.12 %), and to CZK 18,003 a month at 12.00 % with a 3 % fee (APRC 13.32 %).

How to verify the licence and how a non-bank loan differs in consumer protection is covered in the non-bank mortgage.

How the application works

The process is the same as for a standard mortgage, only without a purchase agreement. You apply with proof of income, the bank orders a valuation (odhad) of the property being pledged (usually CZK 3,000–6,000), and approval takes roughly 2–4 weeks from the complete documents. You then sign the loan agreement and the pledge agreement, and an application to register the lien in the land registry (katastr) is filed for CZK 2,000.

The difference comes at the end. The money goes not to a seller or into escrow but to your own account. If you are consolidating loans, the bank usually pays your creditors directly.

What is easy to overlook

• The lien is real. If you stop paying for a long time, the bank can sell the pledged property just as with a standard mortgage, even though you borrowed for a car.
• Pledging someone else's property. If your parents' flat is the collateral, it is on the line for its full value. How to get out of such an arrangement later is covered in Parents' property as collateral.
• A rate tied to conditions. Komerční banka offers its lowest rate only with income paid into a KB account, life and property insurance at KB Pojišťovna and an energy label of A or B, and Fio gives a 0.2 pp discount for repayment protection insurance. Without the conditions the rate is higher.