Struggling to pay your mortgage? From the first week to selling the flat

As soon as you know you won't manage the next repayment, ring the bank before it falls due. Until you are actually in arrears, banks offer payment deferrals, a longer term or a temporarily lower repayment. After several missed payments they move on to collection, and the record in the banking credit register stays with you for 4 years after the debt is settled.

The law gives you time, though not unlimited time. Before the bank can call in the loan, it must ask you to pay the overdue amount and give you at least 30 days to do so (§ 124 of the Consumer Credit Act). It may sell the mortgaged flat no earlier than 6 months after notifying you that it is enforcing its lien, and during that period it must not stop you selling the flat yourself (§ 123).

What happens when a mortgage payment does not arrive?

First a reminder and default interest. The bank can call in the loan only after a written demand that gives you 30 days, and it can sell the flat no sooner than 6 months after it starts enforcing its lien. Step by step:

1. After the due date you get a reminder, and default interest starts to run, possibly with a contractual penalty under the agreement. The law caps penalties at 0.1 % of the amount owed per day and, all together, at half the total loan amount, to a maximum of CZK 200,000 (§ 122).
2. The bank reports the arrears to the BRKI banking register. Your record stays there for 4 years from the day you settle the debt, and every other bank will see it.
3. Before calling in the loan, the bank sends a written demand for payment and gives you at least 30 days. How many missed repayments trigger it is set by your contract.
4. Once arrears exceed 90 days, the bank may charge only default interest at the ČNB repo rate plus 8 pp. In the second half of 2026 that is 11.75 % a year.
5. When the loan is called in, the whole outstanding principal falls due at once. The bank may not claim future interest.
6. If you do not pay, the bank notifies you that it is enforcing its lien. It can sell the flat, usually at auction, no sooner than 6 months later. What happens in enforcement or insolvency is described in Mortgage and enforcement or insolvency.

From the first day of arrears to the sale of the flat, many months usually pass. But the sooner you get in touch, the more options the bank will put on the table.

Week one: how many months can you last?

Before you call the bank, write down the mortgage repayment, the household's new income, unavoidable spending and the reserve in your account. That tells you how many months the money will last and what repayment you can manage for good.

The deciding question is whether the drop in income is temporary or permanent. Illness, parental leave or a few months out of work call for a deferral. Divorce, a permanently lower income or disability need a lower repayment for good, or a sale.

In the same week, dig out your insurance policies. Payment protection insurance usually covers job loss and sick leave once the waiting period set in the policy has passed. Risk life insurance may cover disability. Report a claim straight away, as the deadlines tend to be short.

What can the bank offer if you can't pay?

You have no legal right to a deferral or a longer term. It is an agreement with the bank, usually an addendum to your contract, and the terms vary by bank and by how long you have been a client.

A longer term has one catch: banks want the loan repaid by a certain age, at mBank by 70. If your fixed period is ending soon, consider switching banks as well. The process is described in When your fixed rate ends, and if you are paying expensive loans alongside the mortgage, see Consolidating loans into a mortgage.

Benefits and free debt advice

If your income has dropped sharply, ask at the labour office (úřad práce) about the state social assistance benefit. It replaced, among other things, the old housing allowance, and entitlement depends on the income and assets of the whole household. For owners with a mortgage it comes down to the individual case, so have it assessed at the office itself.

Free debt advice centres will help you draw up a budget and prepare a proposal for the bank. If you want to let the flat and move somewhere cheaper yourself, check whether your contract requires the bank's consent to letting.

Sell before the bank does

If even a lower repayment is not enough, selling on your own terms is almost always better than an auction. You set the price and the timing, and the difference between the sale price and the outstanding debt stays with you.

When you sell the property you can repay the mortgage free of charge, provided at least 24 months have passed since you signed the loan agreement. Repayment is also free after the death, long-term illness or disability of the borrower or their spouse or partner, if it substantially reduces the ability to repay. Otherwise, during the fixed period, the bank may charge no more than 0.25 % of the amount repaid for each started year left until the fixation ends, and no more than 1 % in total.

In practice you ask the bank for a statement of the outstanding balance, and the purchase price goes through escrow straight to repaying the loan. Once it is repaid, the bank issues a confirmation of repayment, and deleting the lien from the land registry costs CZK 2,000. The details are in Selling a flat with a mortgage on it.