How a mortgage for buying a house works, and how it differs from a flat

A mortgage for buying a house works like one for a flat: the bank lends at most 80 % of the value of the house including the land, or 90 % if at least one applicant is under 36. On a CZK 6,000,000 house that is a loan of CZK 4,800,000, which over 30 years at 5.00 % (ČBA average, August 2026) costs CZK 25,767 a month. The valuation, insurance and assessment of an older building work differently, though.

A valuer inspects a house on site, including the land and any outbuildings. The bank wants the building insured with the payout assigned to it (vinkulace), and with an older house it often pays to finance the renovation at the same time, because the bank can then base the loan on the value after the works.

How does a mortgage on a house differ from one on a flat?

You go through the same steps: pre-approval, reservation, valuation, approval, purchase agreement, escrow and registration in the land registry (katastr nemovitostí). The differences lie in what the bank takes as security and what it examines on the property.

How does the bank value a house with land?

The valuer assesses the house, land, garage and other buildings together, and the bank calculates the LTV from the resulting collateral value (zástavní hodnota). Banks offer online valuation without a visit for standard flats; Raiffeisenbank, according to its list of documents, offers it only for a finished residential unit of 30–120 m². For a house, then, expect an inspection and a fee of CZK 3,000–6,000.

The valuer compares what stands on the plot with the land registry and the documentation. An extension missing from them adds no value and can hold up approval. Only minor structures can do without a permit, for example a building of up to 40 m² built-up area and 5 m in height with one above-ground storey, linked to the home and standing at least 2 m from the plot boundary (annex to the Building Act).

With an old house, the length of the loan matters too. The ČNB recommends that the term should not run beyond the borrower's working life or the life of the property, and as a rule should not exceed 30 years. If the valuer gives the house a short remaining life, the bank may shorten the term, and the payment goes up.

What should you check on an older house before reserving it?

• Water and drainage. Mains water and sewerage, or a well and a treatment plant or cesspit? With a well, ask for a water analysis; with a treatment plant, for the papers on how it is run.
• Roof, damp and structure. Cracks, damp walls and old roofing can mean repairs running into hundreds of thousands of crowns. Have a building surveyor go through the house before you sign the reservation.
• Wiring and heating. Original wiring or an old boiler means work that is better built into the loan from the start.
• Access. If the way to the house crosses someone else's land, you need an easement registered in the land registry.
• Flood zone. Find out whether an insurer covers floods in the area, and at what price, before the bank does.
• Land registry entry. Is the house registered as a family house or as a building for family recreation? The bank assesses it accordingly.
• Energy performance certificate. The PENB class gives you an idea of what heating will cost.

Buying and renovating with one mortgage

An older house tends to be cheaper, but within a few years it needs a roof, windows or heating. If you include the renovation in the purchase mortgage, the bank may base the loan on the value of the house once the works are done. mBank, for example, states on its website that for a renovated property taken as security it considers the future value set by the valuer, and releases money for the works either at once based on the valuation or gradually against invoices. What banks accept as renovation is covered in mortgage for renovation.

How much should you insure the house for?

The bank wants the house insured, with the insurance payout assigned to it. The sum insured (pojistná částka) should match what it would cost to rebuild the house, not the purchase price, which includes the land, and not the size of the loan. This matters more for a house than for a flat, because you are insuring the whole building, roof and outer walls included.

Underinsurance does not pay. If the sum insured at the time of the loss is lower than the insured value, the insurer cuts the payout in the same proportion (§ 2854 of the Civil Code), unless your policy says otherwise. For a house whose building is worth CZK 4,500,000 but is insured for CZK 3,000,000, a CZK 600,000 loss brings a payout of only CZK 400,000. Indexation and other points to check are covered in the article on property insurance for a mortgage.

When you need a different loan

• You are building the house: the bank pays out in stages and works with the future value, see mortgage for building a house.
• You are buying land and will build later: the checks before purchase and the banks' conditions are described in mortgage for land.
• The house is registered as a building for family recreation: the bank assesses it as a holiday property, and the 90 % LTV exception for under-36s, meant for owner-occupied housing, usually does not apply, see mortgage for a cottage.
• You are buying the house to let: this is a buy-to-let mortgage, and since 1 April 2026 the ČNB has recommended an LTV of at most 70 %.