An extra repayment (mimořádná splátka) is free of charge in three situations: up to 25 % of the original loan amount once a year, paid in the month before the contract anniversary; any amount at the end of the fixed-rate period (fixace); and any amount within 3 months of being told the new rate for the next fixed period.
Outside these windows, the amendment to the Consumer Credit Act in force since 1 Sept 2024 lets the bank charge at most 0.25 % of the amount repaid for each started year left in the fixed period, and no more than 1 % in total.
The fee matters less than what you ask the bank to do with the money. On a CZK 4,000,000 mortgage over 25 years at 5.00 %, CZK 300,000 paid after five years can either shorten the term, saving roughly CZK 460,000 in interest and finishing 2 years and 8 months early, or reduce the payment by CZK 1,980 a month, saving about CZK 175,000. Shortening saves almost three times as much.
When an extra repayment is free
| Window | How much you can repay | What to watch out for |
|---|---|---|
| Anniversary of the contract | up to 25 % of the original loan amount, once a year | the payment must arrive within 1 month before the anniversary date; take the date from the contract, not from the drawdown |
| End of the fixed period | any amount, even the whole loan | applies as at the date the fixed period ends |
| Within 3 months of notice of the new rate | any amount | the bank must announce the rate at least 3 months before the fixed period ends |
| Special situations | any amount | sale of the property or settlement of community property (SJM) after a divorce (both at least 24 months after the loan agreement was signed); death, long-term illness or disability of the borrower or spouse, if it substantially reduces the ability to repay |
| Variable rate | any time, any amount | no fee for the whole term |
Some banks' contracts are more generous than the law and allow a free extra repayment at any time up to a set limit. The statutory rules are a floor, not a ceiling.
Shorten the term or reduce the payment?
Shorten the term: the payment stays at CZK 23,384 and the loan ends after 208 months instead of the remaining 240 months: 2 years and 8 months earlier. Interest saved: about CZK 460,000.
Reduce the payment: the term stays at 20 years and the payment falls to CZK 21,404, by CZK 1,980. Interest saved: about CZK 175,000.
The gap comes from where the money goes. When you shorten the term you keep paying the original amount, so the sum by which the payment would otherwise have fallen goes into principal every month; when you reduce the payment, you keep that sum. The calculation assumes the same rate throughout. In practice the rate changes with each fixed period, but the ratio between the options stays similar.
A lower payment makes sense if you need slack in your budget, typically before a fixed period ends and you face moving from a low rate to today's 5.00 %. If you can manage the payment, shortening earns more. Try your own figures in the early repayment calculator.
How to make the payment
- Find the anniversary date. What counts is the day the loan agreement was signed: if you signed on 14 March, the free window runs roughly from 14 February to 14 March.
- Submit a request. Most banks have a form in internet banking or at the branch. The terms and conditions usually require notice in advance, and it pays to meet that deadline; otherwise the payment is processed the following month and the window is gone.
- Choose what the payment should do: shorten the term or reduce the monthly payment. If you choose nothing, the bank applies its default, which is often a lower payment.
- Send the money correctly, to the account the bank specifies and with the loan's variable symbol (payment reference), or let the bank debit your current account. Without the right identification the money may be booked as an ordinary payment in advance rather than as a reduction of principal.
- Check the confirmation. The bank should send a new repayment schedule; verify the new principal balance and either the new payment or the new final payment date.
Before you send anything, make sure the amount stays within 25 % of the original loan (unless another free window applies) and that you will still have a reserve afterwards.
What does an extra payment outside the free window cost?
Outside the free windows the bank may charge 0.25 % of the amount repaid for each started year left in the fixed period, no more than 1 % in total, and never more than it actually loses in interest.
| Time left until the end of the fixed period | Max. fee | On CZK 300,000 |
|---|---|---|
| up to 1 year | 0.25 % | CZK 750 |
| 1–2 years | 0.50 % | CZK 1,500 |
| 2–3 years | 0.75 % | CZK 2,250 |
| more than 3 years | 1.00 % | CZK 3,000 |
A rule of thumb: CZK 300,000 on a mortgage at 5.00 % costs about CZK 1,250 a month in interest. If the anniversary is a long way off and you already have the money, a CZK 2,250 fee pays for itself in under 2 months. Waiting for the free window only makes sense if it is close.
When to hold off
- When it would wipe out your reserve. Money put into the mortgage does not come back, so a cushion of several months' expenses comes first; losing your income with an empty account costs more than a few thousand koruna of interest.
- When the fixed period is about to end. At that point you can repay any amount free and you will see the new rate, so if only a few months remain, wait and decide on the offer.
- When you have dearer debts. A consumer loan or credit card costs more than a mortgage; clear those first.
- When you have a safe after-tax return above the mortgage rate. Repaying a mortgage at 5.00 % is a risk-free 5.00 % “return”. Beating that without risk is hard in October 2026; with risk it is possible, and it comes down to how much risk you are willing to take.
The interest tax deduction is rarely a reason to wait. On a balance of CZK 3,543,000 at 5.00 % you will pay roughly CZK 175,000 of interest in the following year, or about CZK 159,000 after a CZK 300,000 repayment. Both are above the CZK 150,000 annual cap, so you lose no tax saving.
Whether to repay early at all is a broader question, covered in Early mortgage repayment: when it pays off.
Sources
- Act No. 257/2016 Coll., on consumer credit, as amended with effect from 1 Sept 2024 (early repayment, creditor's costs)
- Act No. 586/1992 Coll., on income taxes, § 15 (interest deduction, CZK 150,000 limit)
- ČNB – consumer protection: early repayment of consumer credit for housing