Mortgage refinancing step-by-step — how to save hundreds of thousands
Refinancing — moving your mortgage to another bank with a better rate — is the simplest way to save hundreds of thousands of CZK. In 2026 it makes sense for everyone who locked in at 5 % or higher. Here's the complete how-to.
When refinancing makes sense
Refinancing pays off when the new rate is at least 0.3 % lower than what you have now, and you have more than 5 years remaining on the mortgage. With less time left, the savings won't cover the costs of switching.
The best moment is at the end of fixation — by law you can leave without any penalty. At any other time, you'll pay 0.5–2 % of the outstanding balance as a fee.
Step 1: Get offers from 3+ banks
Start 6 months before your current fixation ends. Get a written offer (binding) from at least three banks. Always ask for the APR (RPSN), not just the interest rate — it's the only directly comparable number.
Tip: when you tell a bank you're comparing offers, the rate magically improves by 0.1–0.3 %.
Step 2: Calculate the actual savings
Use our refinancing calculator. Inputs needed:
- Outstanding balance and remaining term of the current mortgage
- Current interest rate
- New rate offer
- One-off costs of switching (typically 5,000–20,000 CZK: appraisal, registry, sometimes a fee at the new bank)
The calculator shows total savings over the new fixation period. If less than 30,000 CZK, refinancing isn't worth the hassle.
Step 3: Sign the new mortgage and pay off the old one
The process: the new bank approves your mortgage, you sign the contract, the new bank pays off the old one and registers a new mortgage on the property. The transfer takes 2–4 weeks if everything is in order.
You'll need: identity documents, proof of income (last 3 months), property documentation, proof of the outstanding balance from the old bank.
Common mistakes
- Accepting the old bank's automatic extension — they bet on your laziness. Always negotiate or refinance.
- Comparing only interest rates, not APR — fees can offset rate advantage.
- Missing the fixation end window — once new fixation starts, you're locked in for another period.
- Forgetting insurance products — the new bank may push life insurance with worse terms than you have now.
FAQ
How much can I really save by refinancing?
On a 4-million-CZK mortgage with 20 years left, dropping the rate from 5.5 % to 4.5 % saves you about 28,000 CZK per year, or 560,000 CZK over the remaining term. Calculate your specific case in our refinancing calculator.
What's the penalty for refinancing in the middle of fixation?
By law, banks can charge documented costs — typically 0.5–2 % of the outstanding balance. On a 3-million-CZK mortgage, that's 15,000–60,000 CZK. Compare against the savings: refinancing in mid-fixation rarely pays off unless the new rate is at least 1.5 % lower.
Can the new bank refuse me even though I'm currently paying my mortgage on time?
Yes. The new bank does its own DSTI/DTI/LTV check. If your income has dropped, your debts have grown, or property prices have fallen, you may not qualify with the new bank even though you're a perfect client at the old one.