The bank releases the money only after you have met the drawdown conditions (podmínky čerpání) in your loan agreement. In practice that means a signed loan agreement and pledge agreement, a filed application to register the bank's lien in the land registry (katastr nemovitostí), property insurance assigned to the bank (vinkulace), the purchase or escrow agreement, and proof that your own funds are already with the seller or in escrow.
When buying a flat with the paperwork in order, expect anything from a few days to a few weeks after signing.
The money never passes through your account. It goes straight to the seller, into an attorney's or bank escrow account, or (when you are building) to the contractor. Nor do you have to wait until you are registered as the owner: the bank pays out against the filed application, because the order of filing in the land registry already protects its lien.
What does the bank need before it pays out the mortgage?
The exact list is in your loan agreement under “Drawdown conditions” (sometimes called “conditions precedent”, odkládací podmínky). For a finished flat or house, most banks ask for the following:
| Condition | Who arranges it | Where it most often gets stuck |
|---|---|---|
| Signed loan agreement (úvěrová smlouva) and pledge agreement (zástavní smlouva) | you + the bank | a co-owner's or spouse's signature is missing |
| Application to register the lien (návrh na vklad zástavního práva) filed with the land registry (with the filing-office stamp or confirmation of submission) | the bank or you | an error in the property description, the CZK 2,000 fee not paid |
| Property insurance with the insurance payout assigned to the bank (vinkulace) | you | the policy has a lower sum insured than the bank requires; the assignment not confirmed by the insurer |
| Purchase agreement (kupní smlouva), or an escrow agreement (smlouva o úschově) | attorney / notary / bank | the escrow does not match the bank's instructions (to whom and on what conditions it is paid out) |
| Proof that your own funds have been paid | you | own funds sent only after the drawdown request |
| Current title sheet (list vlastnictví), or deletion of old liens | the seller / the seller's bank | the property carries the seller's lien with no agreement on paying it off |
Building or renovating adds a building permit (stavební povolení, or another decision of the building authority), a budget and the project documentation. With a developer's new build, the bank sometimes also wants the occupancy approval (kolaudace) or the flat's entry in the land registry. Once everything is in place, you submit a drawdown request (žádost o čerpání), either on a paper form or as an instruction in internet banking with the attachments. Banks usually process it within a few working days.
Why does the bank pay before you own the property?
Buyers are often surprised that the bank sends millions for a property that is not yet theirs. The reason is that the land registry records rights in the order in which applications arrive. Once the application to register your ownership is filed, followed by (or together with) the application to register the lien, a pending-change flag (plomba) appears on the title sheet and nobody can get in ahead of the bank. The registry may make the entry no sooner than 20 days after it notifies the owner of the pending change, so the registration itself takes several weeks: in August and September 2026 a registration took 22 days on average (ČÚZK).
Escrow (úschova) is the second safeguard. The bank pays into an attorney's, notary's or bank escrow account, and the seller receives the money only after your ownership and the bank's lien are both registered. If the registry turned the application down, the money would go back to the bank and you would never start repaying. Paying the seller directly, without escrow, is rare. Banks allow it mainly with developers who have a long track record, or when you buy from a municipality.
Mind the order of payments. Most banks want your own funds to go in first, before any loan money. Buying a flat for CZK 5,000,000 with a CZK 4,000,000 mortgage, you first pay your CZK 1,000,000 into escrow and attach the proof to the drawdown request.
One-off or staged drawdown
| One-off | Staged | |
|---|---|---|
| Typical use | buying a flat, house or plot, refinancing | building a house, renovation, a new build paid according to a schedule |
| Number of requests | one | several (by invoices or stages) |
| What you document | purchase agreement, escrow | invoices, a statement of work done, photos, possibly an inspection by the bank's technician |
| Payments until fully drawn | annuity from the following month | interest only on the amount drawn |
| Drawdown deadline | usually shorter (months) | longer, agreed according to the construction schedule |
Staged drawdown works on the principle of your money first, the bank's second. The bank wants to see your own funds spent on the build before it finances the next stage, and before each tranche it may send a technician to check progress. That inspection is charged separately and adds a few days. For the details, see Mortgage for building a house.
What you pay before the full instalment starts
While a staged drawdown is running, you pay no annuity instalment, only interest on the amount drawn so far. The principal does not go down in this period. Full annuity repayments start after the last tranche or when the drawdown deadline expires, whichever comes first.
Staged drawdown in figures: a house on a CZK 4,000,000 mortgage at 5.00 % over 25 years
- 1st tranche of CZK 1,000,000 (shell construction): interest 1,000,000 × 5 % / 12 = CZK 4,167 a month.
- After the 2nd tranche you have drawn CZK 2,500,000, so the interest is CZK 10,417 a month.
- Interest alone on the full CZK 4,000,000 would be CZK 16,667, but once drawdown ends the annuity of CZK 23,384 a month takes over.
Say construction takes 12 months: CZK 4,167 a month for the first six and CZK 10,417 for the next six. The drawdown phase then costs about CZK 87,500 in interest, which belongs in your budget, all the more so if you are paying rent at the same time.
Interest paid while you build your own home is tax-deductible like any other mortgage interest (up to CZK 150,000 a year for mortgages taken out from 1 January 2021). It appears on the bank's annual interest certificate (potvrzení o zaplacených úrocích).
What happens if the drawdown deadline passes
Every loan agreement sets a final drawdown date (konečný termín čerpání). For a purchase this is typically 6–12 months after signing. For construction it follows the building schedule and tends to be longer. If the date passes before the loan is fully drawn, the contract will provide for one of the following:
- An extension by amendment (dodatek). You apply in advance with an updated budget or schedule. Some banks charge for the amendment; others do it free if you ask in time.
- The undrawn part lapses. Your loan shrinks to the amount drawn, the bank recalculates the annuity, and from the following month you repay a smaller principal. You will have to find the shortfall elsewhere.
- A fee on the undrawn amount. Some contracts charge a commitment fee for keeping the money available, so read the fee schedule (sazebník) before you sign.
With a finished property the deadline rarely causes trouble. Construction is different, because permits and deliveries can drag on. If you can see a delay coming, apply for the extension at least a month ahead, not after the date has passed.
Five delays that hold up the payout
- The insurer is slow to confirm the assignment. Take out the policy as soon as the loan is approved and ask the insurer in writing to confirm the assignment (vinkulace). The bank will not pay without it.
- The escrow agreement does not follow the bank's template. Send the draft to the bank for approval before you sign it with the seller.
- The seller still has a mortgage. Their bank must issue a statement of the outstanding balance and consent to the lien being deleted. This can take several weeks, so ask for it as soon as the reservation agreement is signed.
- Your own funds arrive late. Send them to escrow in good time, because an interbank payment can get stuck over a weekend.
- The purchase agreement has a fixed payment date. Leave yourself a buffer: a price payable “within 30 days of the drawdown conditions being met” is safer than a calendar date.
For the full timeline from application to registration, see How long does it take to arrange a mortgage.
Sources
- Act No. 257/2016 Coll., on consumer credit (pre-contract information, creditworthiness assessment)
- Act No. 256/2013 Coll., on the land registry (Cadastral Act) – registration proceedings, pending-change flag (plomba)
- Act No. 89/2012 Coll., Civil Code, § 1309 et seq. (lien)
- ČNB – macroprudential policy, LTV limit