Mortgage over 20 or 30 years? The maths on CZK 4 million

For most buyers in 2026 the better choice is to sign for 30 years and repay faster with extra payments rather than commit to 20. On a CZK 4 million mortgage at 5.00 %, the shorter term costs CZK 4,925 more a month (CZK 26,398 vs. 21,473) but saves CZK 1.39 million in interest (CZK 2.34 vs. 3.73 million).

Send that monthly difference to the bank once a year as an extra payment (mimořádná splátka) and the 30-year mortgage is paid off in 20 years and 3 months, for only CZK 46,000 more than a straight 20-year loan. Think of those CZK 46,000 as an insurance premium. When parental leave, a lost job or a new roof comes along, you keep paying CZK 21,473 and simply skip the extra payment.

A shorter term makes sense when the budget has plenty of slack and you doubt your own discipline, or when your age leaves no choice.

20 or 30 years: what does CZK 4 million cost?

Assumptions: a CZK 4,000,000 mortgage, 5.00 % throughout, monthly annuity payments, no fees or insurance.

The difference starts with the very first payment. Interest for the first month on CZK 4 million is the same whatever the term: CZK 16,667. On a 20-year mortgage CZK 9,732 of the payment goes towards the principal (úmor); on a 30-year one only CZK 4,806.

That is why after five years you still owe CZK 335,000 more on the 30-year mortgage than on the 20-year one, and after ten years CZK 765,000 more.

30 years, plus one extra payment a year

Since the amendment to the Consumer Credit Act took effect on 1 September 2024, you can repay up to 25 % of the original loan amount each year, free of charge, in the month before the contract anniversary (výročí smlouvy). The whole strategy rests on this. The bank sees a 30-year mortgage with a low compulsory payment, and you repay at the pace of a 20-year one.

The CZK 46,000 gap exists only because the money sits with you for a year instead of reducing the principal. Keep it in a savings account in the meantime and the interest wins part of it back.

The real value lies elsewhere, though. In a year when you need the money for something else, you skip the extra payment and nothing happens. With a 20-year mortgage you owe CZK 26,398 every month, and if you cannot pay it you have to ask the bank for a payment holiday or a longer term and rely on its goodwill.

There is one condition: you actually have to do it. Spend the difference and you pay CZK 1.39 million more. Our article on early mortgage repayment explains how it works in practice.

How much more will the bank lend over 30 years?

DSTI was deactivated on 1 July 2023 and DTI on 1 January 2024, so no binding ČNB limit ties your payments to your income any more. Banks keep their own internal thresholds instead, usually 45 % of net income or 50 % for applicants under 36. A longer term therefore directly raises the maximum loan:

A household with CZK 50,000 net can borrow CZK 782,000 more over 30 years than over 20. In Prague, where new flats cost around CZK 146,000–150,000 per m², 30 years is often the only way to stay within the bank's internal threshold at all. Check your own figure in the How much can I borrow calculator.

Can you get a mortgage for 35 or 40 years?

At some banks, yes. mBank, for example, offers its housing mortgage for up to 40 years, but the loan must be repaid by the time the oldest applicant turns 70, so only someone aged 30 or younger gets the full 40. The ČNB recommends that a housing loan should as a rule run no longer than 30 years, or than the borrower's working life (recommendation of 27 November 2025, applying from 1 April 2026). That is not a legal limit, and each bank's own rules decide.

Even where a bank allows it, the payment barely moves. CZK 4,000,000 at 5.00 % costs CZK 21,473 a month over 30 years, CZK 20,188 over 35 and CZK 19,288 over 40, while total interest climbs from CZK 3.73 million to 4.48 and then 5.26 million. Each extra five years takes CZK 900–1,300 off the payment and adds CZK 750,000–780,000 of interest.

At refixing, the longer term is more exposed

The rate holds only for the fixed-rate period. At refixing (refixace) the new payment is calculated from the outstanding balance, and with a longer term that balance is higher. Suppose the fixation ends after five years and the new rate is 6.00 % instead of 5.00 %:

• 20 years: balance CZK 3,338,195; the payment rises from CZK 26,398 to CZK 28,170 (+CZK 1,772).
• 30 years: balance CZK 3,673,149; the payment rises from CZK 21,473 to CZK 23,666 (+CZK 2,193).

Even after the increase the 30-year payment is CZK 4,504 lower, so the household keeps the bigger buffer. In percentage terms, though, it rose more (10.2 % against 6.7 %). Bank price lists in October 2026 are raising mainly the longer fixations (Hypoindex 5.79 %), so the refixing risk is real for both.

Age, taxes and inflation

Age often decides the term for you. Banks set an age limit (věková hranice) by which the mortgage must be repaid, and each bank's limit is different. For applicants around fifty, 30 years is often off the table and the older applicant's age sets the term. Our article on mortgages for older borrowers goes into the detail.

Taxes barely move the needle. Interest on a mortgage for your own home is deductible up to CZK 150,000 a year (loans from 1 January 2021). On CZK 4 million at 5.00 % you pay CZK 197,286 of interest in the first year on a 20-year term and CZK 198,660 on a 30-year one, so both use the full cap.

Annual interest drops below CZK 150,000 in year 8 of a 20-year mortgage and in year 14 of a 30-year one. Over the first 10 years the difference in deductible interest is CZK 34,448, a tax saving of only about CZK 5,200. Do not pick the term for tax reasons.

Inflation works slowly in the borrower's favour. An annuity payment stays the same in nominal terms but shrinks in real terms. With inflation at 1.9 % (August 2026) the effect is modest, but over a 30-year horizon it helps, because the later payments are made in cheaper koruna.

When a shorter term wins

Choose 20 or 25 years if most of these apply to you:

• The 20-year payment is below 35 % of net household income and you have a reserve covering 6 months of expenses.
• You know you would neither send the saved difference to the bank nor invest it.
• The older applicant's age rules out 30 years anyway.
• You do not expect your income to drop (parental leave, a career change, a business just starting up).
• You want to be mortgage-free before you retire or before your children go to university.

Thirty years makes more sense when you are close to the bank's internal threshold, have irregular income, are planning children or want to be able to “throttle” the payment whenever you need to. Nor is the choice final. You can shorten the term with an extra payment or at refixing, whereas lengthening it usually needs the bank's consent and a new creditworthiness assessment.