You sell a mortgaged flat or house the same way as an unencumbered one. The mortgage is repaid straight from the purchase price: the buyer pays into a lawyer's or notary's escrow account (advokátní / notářská úschova), the exact amount owed goes to your bank first and only the rest comes to you. The bank then issues a receipt of repayment (kvitance) and the lien (zástavní právo) is deleted from the land registry (katastr).
What repayment costs depends on one date: when you signed the loan agreement, which for a purchase mortgage is roughly when you bought. Under the rules in force since 1 Sept 2024, selling at least 24 months after signing lets you repay free of charge, even part-way through a fixed-rate period. Sell earlier and the general rule applies: at most 0.25 % of the amount repaid for each started year until the fixed period ends, and no more than 1 % in total. The other question is tax on the gain, which you avoid if you lived in the flat for at least 2 years, pass the holding period test (časový test) or put the money into your own housing.
What does repaying the mortgage on a sale cost?
| When you sell | Early repayment fee | Note |
|---|---|---|
| At least 24 months after the loan agreement was signed | CZK 0 | statutory exception for a sale, applies even mid-fixation |
| Less than 24 months after the loan agreement was signed | 0.25 % of the amount repaid for each started year until the end of the fixed period, max. 1 % | and never more than the bank actually loses in interest |
| At the end of the fixed period or within 3 months of notice of the new rate | CZK 0 | regardless of how long you have owned the property |
The sale exemption covers loans to which the amendment to the Consumer Credit Act, effective from 1 Sept 2024, applies. With older contracts, check what the contract and the terms and conditions say, although many banks apply the new rules across the board. Fees are analysed in more detail in Early mortgage repayment.
From reservation to money in your account
Allow roughly 6–10 weeks in total. The steps run like this:
- Payoff statement. Ask the bank to confirm in writing what you will owe on the planned repayment date, including interest for each extra day. Interest runs daily, so a figure for a single date is not enough if the escrow payout is delayed.
- The bank's consent to the sale. Pledge agreements usually forbid disposing of the property without it. When the loan is repaid from the price the bank gives consent routinely, but it wants to see the draft purchase and escrow agreements.
- Purchase and escrow agreements. The payout instructions must give the bank's account number, the loan's variable symbol (the Czech payment reference) and the exact amount from the payoff statement; only the rest goes to the seller.
- Payment of the price. The buyer pays in their own funds, and their bank draws down the mortgage into escrow.
- Registration of ownership. Once the application is filed, the land registry marks a plomba (pending-change flag) and may make the entry no sooner than 20 days after notifying the owner; in August and September 2026 a registration took 22 days on average (ČÚZK). The fee is CZK 2,000.
- Payout from escrow. When the buyer appears on the title sheet (list vlastnictví), the lawyer sends the money to your bank and the rest to you.
- Receipt and deletion of the lien. The bank confirms the repayment and consents to the deletion, and on that basis an application to delete the lien (výmaz zástavního práva) is filed with the land registry. The buyer's lawyer or bank often takes care of this.
| Phase | Usual duration |
|---|---|
| Reservation, payoff statement and deletion commitment from your bank | 1–2 weeks |
| Approval of the buyer's mortgage (from complete documents) | 2–4 weeks |
| Signing the purchase agreement, paying into escrow, application for registration | a few days |
| Registration of ownership in the land registry | no sooner than 20 days after the owner is notified of the plomba, 22 days on average (August and September 2026) |
| Payout from escrow, receipt, application to delete the lien | days to weeks depending on the bank |
If you are buying another home and need the money sooner, the answer is bridging finance, not signing a new purchase agreement in the hope that the money arrives in time. The split of payments and the escrow instructions are covered in Purchase agreement and escrow.
When the buyer is also borrowing
This is the most common variant and the most complicated. The buyer's bank wants its lien in first place, but your bank's lien is still on the title sheet. There are two usual fixes:
- A commitment to delete the lien. Your bank confirms that once it receives the stated amount it will consent to the deletion, and on that basis the buyer's bank accepts its own lien in second place for a while and releases the loan.
- Drawdown straight onto your loan. Part of the buyer's mortgage goes directly to your bank to clear the debt, and the rest goes into escrow or to you.
Every bank has its own forms and deadlines, so ask for the payoff statement and the deletion commitment as soon as the reservation agreement is signed. They take days to issue, not hours, and without them the buyer's bank will not release the money. Meanwhile the buyer's own approval usually takes 2–4 weeks from complete documents.
When do you pay no tax on the sale?
The mortgage makes no difference to tax; what matters is how long you owned the property and lived in it. The proceeds are exempt if you meet at least one of these conditions:
- the property was your registered residence for at least 2 years immediately before the sale;
- you pass the holding period test: 10 years of ownership for property acquired from 2021, 5 years for property acquired earlier;
- you use the proceeds for your own housing and notify the tax office (finanční úřad).
Otherwise you pay tax on the gain (sale price minus the purchase price and documented costs) at 15 %, or 23 % on high incomes. The property sale calculator works out what you keep after tax and costs, and the link with the interest deduction is covered in Mortgage and taxes.
The same flat sold after four years and after 18 months
Option B, a sale after 18 months: the same flat with the same mortgage, but bought in October 2024 and sold in April 2026 for CZK 5,500,000. The balance is about CZK 3,875,000. With a five-year fixed period, 4 started years remain, so the bank may charge up to 1 %, or CZK 38,750 (and no more than it actually loses in interest). You lived there for less than 2 years and do not pass the holding test, so the CZK 500,000 gain (before other costs) is taxed at 15 %, which means up to CZK 75,000, unless you put the money into your own housing.
Option B costs more than CZK 110,000 in fees and tax that option A avoids. If you are thinking of selling soon after buying, work out whether waiting a few months pays.
Mistakes that delay a sale or make it dearer
- An out-of-date payoff statement. Escrow pays out less than the debt on the day, the loan is left short by the interest and the bank will not issue the receipt.
- No variable symbol in the escrow instructions, so the payment gets stuck in a technical account at the bank.
- No application to delete the lien. The receipt alone does not remove the lien, and without the application it stays on the buyer's title sheet.
- Forgotten linked products. After repayment, cancel the direct debit, the payment protection insurance and the property insurance with its assignment (vinkulace), or you will keep paying for them.
- Selling without telling the bank. Signing a purchase agreement without the secured creditor's consent breaches the pledge agreement and complicates registration.
Sources
- Act No. 257/2016 Coll., on consumer credit, as amended with effect from 1 Sept 2024 (early repayment on sale of the property)
- Act No. 586/1992 Coll., on income taxes, § 4(1) (exemption of income from the sale of real estate)
- ČÚZK (Czech Office for Surveying, Mapping and Cadastre) – registration in the land registry, administrative fee CZK 2,000
- Act No. 89/2012 Coll., the Civil Code, § 1309 et seq. (lien)