Mortgage for self-employed (OSVČ) — practical guide
OSVČ (sole traders, freelancers) have it more complicated than employees. Instead of a salary slip, the bank scrutinizes 2 tax returns, interprets flat-rate expenses differently, and has specific requirements. Here's the full guide.
How banks calculate OSVČ income
Banks use one of two methods:
- From tax returns: average net profit over the last 2 years (sometimes 1 year is enough). Profit = revenues minus actual expenses.
- From flat-rate expenses: revenues minus the % of flat-rate expenses you applied (40, 60, 80 %). Bank typically takes 50–70 % of revenues as the qualifying income.
For most OSVČ, flat-rate expense method gives lower qualifying income — you'll borrow less than you would as an employee with the same actual income.
How long must you be in business?
Most banks require 2 complete tax years of self-employment. Some accept 1 year if you have prior employment in the same field.
If you switched from employment to OSVČ recently, wait 2 years before applying — or apply jointly with an employed co-applicant whose income covers DSTI.
Documents the bank needs
- Tax returns for the last 2 years (full, with all annexes)
- Confirmation of paid taxes (sometimes)
- Bank statements for the last 6–12 months — flow on the business account
- Trade licence (živnostenský list)
- Health and social insurance certificates
Practical tips
- Don't optimize taxes too aggressively in the year before applying. Lower declared profit = lower mortgage. Plan 2–3 years ahead.
- Use a personal account, not your business account, for living expenses. Banks like to see "salary-like" outflows from business to personal.
- Consider switching from flat-rate to actual expenses if the gap between method results is large.
- Apply jointly with an employed partner if possible. Their stable income is gold.
FAQ
I do flat-rate expenses 60 %. What income does the bank see?
Typically 40 % of your revenues (the bank assumes that's your net). On revenues of 1,200,000 CZK/year, the bank sees 480,000 CZK qualifying income. As an employee with the same gross, you'd qualify on much more.
I just opened a sole trader business. Can I get a mortgage?
Almost no bank will lend without 2 complete tax years. Exception: if you transitioned from employment to self-employment in the same field, 1 year may be enough.
Are interest rates higher for OSVČ?
Sometimes 0.1–0.3 % higher because of perceived risk. The bigger problem is qualifying for the desired amount, not the rate.