If you fixed your mortgage at around 2 % for five years in 2021, the offer you receive in 2026 is roughly three percentage points higher. On a CZK 4,000,000 loan over 25 years at 1.99 %, the payment goes from CZK 16,935 to CZK 22,113 even at the average rate of 5.00 % (ČBA, August 2026), which is more than CZK 5,000 a month extra.
With the bank's first offer, taken straight from its price list, the jump in the payment tends to be bigger still. You can soften it. Negotiate a better rate, move to another bank, extend the term, or make an extra repayment, which the law lets you do in any amount free of charge when the fixation ends. Below, all of this is worked out for one family. If your main question is whether to stay with your bank or leave, carry on with Refixation or refinancing.
The Dvořáks and the letter from their bank
In autumn 2021 the Dvořáks borrowed CZK 4,000,000 over 25 years with a five-year fixed rate (fixace) of 1.99 %. They pay CZK 16,935 a month. Over those five years they have paid the bank CZK 366,800 in interest and repaid CZK 649,300 of principal, so they still owe CZK 3,350,700, with 20 years to go.
In August 2026 a letter arrived offering a new rate of 5.80 % for the next five years. The payment would rise to CZK 23,620, an increase of CZK 6,685 a month. For a household with a net income of CZK 60,000, that takes the mortgage from 28 % of income to 39 %. They have three months left before the fixation ends.
What must the bank do when your fixation ends?
- The bank must tell you the new rate at least 3 months before the fixation ends.
- At the end of the fixation, and within 3 months of the notice, you can repay part or all of the loan without a fee, either with your own money or with a mortgage from another bank.
- If you do nothing, the contract simply continues at the rate in the letter. Refixing needs no signature and no fresh assessment of your income.
- Once that window has closed, leaving costs money: up to 0.25 % for each started year until the end of the new fixation, and no more than 1 % in total.
The rate in the letter is the bank's opening position, not its final price. Losing a client costs a bank more than a discount does, so with a competing offer in hand there is room to negotiate.
How can you soften the jump in your payment?
The family's balance of CZK 3,350,700 (annuity payment; they currently pay CZK 16,935):
| Option | New payment | Increase |
|---|---|---|
| A. Accept the letter: 5.80 %, 20 years | CZK 23,620 | +CZK 6,685 |
| B. Retention offer after negotiating: 5.20 %, 20 years | CZK 22,485 | +CZK 5,550 |
| C. Another bank: 5.00 %, 20 years | CZK 22,113 | +CZK 5,178 |
| D. As C, with the term extended to 25 years | CZK 19,588 | +CZK 2,653 |
| E. As C, plus an extra repayment of CZK 300,000 | CZK 20,133 | +CZK 3,198 |
The difference between A and C is CZK 1,507 a month, over CZK 90,000 across five years. Rates B and C are illustrative, taken from the 4.7–5.8 % range of October offers.
Option D cuts the payment the most, but at the price of a longer debt and more interest overall. It works as a temporary fix, with a plan to shorten the term again later through extra repayments, and banks allow it only up to their age limit and after reassessing your income. Option E relies on the rule that when the fixation ends you can pay in any amount without a fee. Savings turn into a lower payment here, but keep a cushion.
Before you sign the letter, work out your refinancing saving after the costs of switching.
Tax gives part of the increase back
A higher rate means more interest paid, and on a mortgage for your own home that interest comes off your tax base. In the fifth year at 1.99 % the family paid about CZK 68,100 in interest, which cut their tax by roughly CZK 10,200 a year. At 5.00 % they will pay CZK 165,300 in the first year of the new fixation. They can deduct CZK 150,000, the cap for loans taken out from 2021, and so save CZK 22,500 a year.
The deduction is therefore worth CZK 12,300 a year more than before, about CZK 1,000 a month, provided they pay at least that much income tax. How to claim it is explained in Mortgage interest deduction.
If you still can't manage the payment
Contact the bank before you miss the first payment. It has more options while you are not yet in arrears: extending the term, a temporary payment holiday or a shorter fixation at a lower rate. Adding a co-borrower with their own income can help if you refinance.
If none of that is enough, a planned sale of the flat is better than falling behind. Default interest in the second half of 2026 is 11.75 % a year, and a record in the credit registers shuts the door on further loans for years. The step-by-step procedure is in What to do if you can't pay your mortgage.
Which fixation to choose this time
In October 2026 a one-year fixation is the cheapest, because banks have raised longer fixations the most. For a family that has just absorbed a jump of five thousand a month, though, a short fixation is another bet. If rates rose over the next year, the letter and the stress would come round again. Figures for 1, 3 and 5 years are compared in Which fixed-rate period to choose.
Once you sign the new fixation, put a reminder in your calendar six months before it ends. That is when preparing for the next round begins.
Sources
- Act No. 257/2016 Coll., on consumer credit, as amended with effect from 1 Sept 2024 (notice of the new rate, early repayment, § 117)
- Act No. 586/1992 Coll., on income taxes, § 15(3) (interest deduction, CZK 150,000 cap for loans from 1 Jan 2021)
- ČBA Hypomonitor – average rate on new mortgages, August 2026
- Government Regulation No. 351/2013 Coll., setting the rate of default interest