Mortgage for land — rules, banks, conditions
Buying land for future construction with a mortgage is possible but with stricter rules. Banks see undeveloped land as more risky than property — slower to liquidate.
Conditions for land mortgage
- Lower max LTV — typically 50–70 %, vs. 80 % on property
- Higher rate — 0.3–0.7 % above standard
- Land must be 'building plot' (stavební pozemek) — agricultural land usually rejected
- Connection to utilities required (or planned) — electricity, water, sewage
- Term shorter — up to 20 years typically
Combination with construction mortgage
Common pattern: land mortgage + construction mortgage on same loan, in stages:
- Land purchase — first drawdown
- Construction begins — staged drawdowns based on progress (similar to renovation mortgage)
- Final inspection — last drawdown
This is structured as a single mortgage product (úvěr na výstavbu) with combined LTV usually 70 %.
What banks reject
- Agricultural land without zoning change
- Forest land
- Land in flood zones
- Land without road access
- Land with unresolved ownership disputes
FAQ
Can I get a mortgage on agricultural land?
Generally no — banks lend only on land zoned for building. Land use change (změna územního plánu) is possible but takes years and isn't guaranteed.
How much down payment for land?
Typically 30–50 %. Higher than property because land is harder to liquidate if you default.
Should I get land + construction together or separately?
Together is cleaner — one loan, one rate, one process. Separately gives flexibility (you can change construction plans), but stacked closing costs and higher total rate.