Signing the mortgage contract — what to check
Signing a mortgage contract is one of the most important moments — and once signed, it's hard to change. Here are 7 things to verify before signing.
1. Rate and APR (RPSN)
Bank must show both. APR includes all fees and is the directly comparable number. If APR is more than 0.5 % above the rate, ask what's included — there are mandatory products you may not need.
2. Fixation period and end-of-fixation procedure
What rate after fixation ends? "Bank's market rate" is vague — push for specifics. The contract should describe how the bank determines the new rate (which index, what margin) and how much notice they give you.
Without specifics, the bank can offer terrible rates at the end of fixation, knowing you face friction to refinance.
3. Early repayment conditions
Czech law caps fee at documented costs — but "documented costs" varies by contract interpretation. Verify:
- 25 % per year free prepayment (legal minimum)
- End of fixation free (legal minimum)
- What happens outside these — typical fee 0.5–1 % of prepaid amount
4. Mandatory insurance products
Some banks require: payment-protection, property insurance (always required), life insurance (sometimes, controversial). Check if you can use existing policies from elsewhere — often "required" is actually "preferred".
5. Account and maintenance fees
200 CZK/month for an account, 500 CZK for an annual statement, 1,500 CZK for an early-repayment certificate. These add up — over 25 years, 5–10 % of total mortgage cost can be fees, not interest.
6. Cross-default and acceleration clauses
Some contracts let the bank call the entire mortgage if you default on ANY other obligation (other loans, even unrelated). Push back on this — it should only apply to mortgage payments.
7. Right of withdrawal
By Czech law, you have 14 days to withdraw from the contract without penalty. Use this if you spot something concerning post-signing.
FAQ
Should I bring a lawyer?
For mortgage signing, usually not necessary if you're using a major bank's standard contract. For non-standard structures (cooperative, foreign income, business loans), yes.
What if the contract differs from what was promised verbally?
Written contract overrides verbal promises. Don't sign anything that doesn't match the offer letter. If they push back, walk away — most banks honor written commitments.
How long does signing take?
About 1–2 hours at the bank. Bring ID, proof of own funds, property documentation. Some banks offer notarized signing if you need it for the registry.