For most people a fixed rate is the better choice in October 2026. A variable rate is made up of three-month PRIBOR, which stands at around 3.9 %, plus the bank's margin. With a margin of 1.5 pp that comes to roughly 5.40 %, while the average rate on new fixed-rate mortgages in August 2026 was 5.00 % (ČBA Hypomonitor). Today the variable rate is dearer, and uncertain on top of that.
It has a single advantage, but a real one: you can repay a variable-rate loan at any time without a fee. That makes it useful mainly for people who know they will soon pay off a large part of the debt. For everyone else the decision is about the length of the fixed period rather than its type.
The difference in one table
| Fixed rate | Variable rate | |
|---|---|---|
| How it is set | the bank sets it for the whole fixed period (1–10 years) | PRIBOR plus the bank's margin, fixed in the contract |
| How often the payment changes | only when the fixation ends | as the contract says, usually every 1–3 months |
| Early repayment | free in the month before the anniversary (25 % a year), at the end of the fixation and in other statutory cases; otherwise at most 1 % | free at any time and in any amount |
| Who carries the risk of rising rates | the bank, until the fixation ends | you, all the time |
| Price in October 2026 | new contracts average 5.00 % (August), one-year fixation from 4.59 % | around 5.40 % with a 1.5 pp margin (illustrative) |
| Availability | every bank | only some banks, often on request |
The last row matters in practice. Only a small minority of borrowers in Czechia take a variable rate, and banks often leave it off comparison sites altogether. If you want one, you have to ask.
How is a variable mortgage rate calculated?
The base is PRIBOR, the interbank rate at which banks lend each other money for a set period. Mortgages are most often tied to three-month PRIBOR. The bank adds its margin, which stays fixed in the contract for the whole life of the loan. At each repricing, typically once every three months, the bank takes the current PRIBOR and recalculates the payment over the remaining term.
PRIBOR follows the ČNB repo rate, which has been 3.75 % since 19 June 2026. Three-month PRIBOR sits slightly higher because it reflects market expectations: the ČNB meets on 5 November 2026, and a rise to 4.00 % is possible but not certain.
If that rise came, variable rates would follow within a few weeks. A fixed rate would stay where it is until the fixation ends.
What it does to the payment
Worked out for CZK 4,000,000 over 25 years (annuity payment; variable rate = PRIBOR 3.90 % + an assumed margin of 1.50 pp):
- Fixed rate 5.00 %: payment CZK 23,384, unchanged until the fixation ends.
- Variable rate 5.40 %: payment CZK 24,325, which is CZK 941 more from day one.
- PRIBOR 1 pp higher after a year (6.40 %): the payment for the remaining 24 years rises to CZK 26,686.
- PRIBOR 1 pp lower after a year (4.40 %): the payment falls to CZK 22,075.
The variable rate would beat a fixed 5.00 % only if PRIBOR fell by more than 0.4 pp. Against a one-year fixation from 4.59 % it would need an even bigger fall.
For a household budget the spread matters more than the starting price. After one year the gap between the good and the bad scenario is over CZK 4,600 a month, and there is no way to “lock in” the rate.
When should you choose a fixed rate?
- The payment takes a large share of your income, and a rise of CZK 2–3 thousand would throw the budget off.
- Your savings would not cover even several monthly payments.
- You are not expecting any large sum in the coming years that you would want to put into the mortgage.
- You want to plan ahead: parental leave, children's studies, a period on one income.
Choose the length of the fixation by the same logic. In October 2026 a one-year fixation is the cheapest, but it carries much the same risk as a variable rate, only with a year's delay. The scenarios are worked through in Which fixed-rate period to choose.
When a variable rate makes sense
A variable rate is a tool for specific situations, not a bet on falling rates. It makes sense when:
- You expect a large repayment within months. The sale of another flat, an inheritance or a payout for a share, when you want to clear the debt straight away rather than wait for the anniversary or the end of the fixation.
- You will sell the property less than 24 months after signing the loan agreement. Until then the law does not exempt a sale from the early repayment fee.
- Only a small balance is left, and you will clear it quickly with extra repayments.
- You have savings that would cover a payment several thousand koruna higher, and you believe rates will fall. That is speculation, though, and should be treated as such.
The variable rate's advantage shrank with the amendment to the Consumer Credit Act in force since 1 September 2024. With a fixed rate, repaying outside the free windows now costs at most 0.25 % for each started year until the end of the fixation, and no more than 1 % in total, so at most CZK 10,000 on CZK 1,000,000. When repaying early is worth it is covered in When to repay a mortgage early.
Sources
- ČNB – monetary policy decisions, repo rate 3.75 % since 19 June 2026
- ČNB – PRIBOR fixing
- ČBA Hypomonitor – average rate on new mortgages, August 2026
- Act No. 257/2016 Coll., on consumer credit, § 117 (early repayment, loans with a floating rate)