If a bank turns down your mortgage, first find out why. There are usually six reasons, and each has a different fix. A loan that is too large for your income can be helped by a longer term, a smaller amount or a co-applicant; a low valuation by more of your own funds or a second property as collateral; a credit register record mainly by time. Applying blindly at other banks rarely helps.
Under § 89 of the Consumer Credit Act the bank must tell you without undue delay that it has refused you. If the decision came from automated scoring or from register data, it must also tell you the result and which database it used. It does not have to hand over its full internal reasoning, but you can always ask, and it is worth getting the answer in writing.
Why was your mortgage rejected?
Almost always for one of six reasons, each with its own fix and timescale:
| Reason | How you can tell | What helps | How long it takes |
|---|---|---|---|
| Repayment above the bank's internal threshold | the bank offers a lower amount or cites insufficient creditworthiness | a longer term, a smaller loan, a co-applicant, paying off small loans | weeks to months |
| The bank did not accept your income | probation period, a short business history, income from abroad | end of probation, another tax return, a bank with a different method | months |
| Low valuation, too little of your own money | valuation below the purchase price, LTV above 80 % | a discount from the seller, additional collateral, a gift, LTV 90 % under 36 | weeks |
| A credit register record | the bank names BRKI, NRKI or SOLUS | pay it off, provide an explanation, wait | months to years |
| Enforcement or insolvency | an entry in the register of enforcement proceedings or the insolvency register | end the proceedings and wait | years |
| A problem with the property | the valuer flags an easement, missing occupancy approval or land registry defects | fix the paperwork, choose another property | weeks to months |
Age belongs in the first row too. Banks want the mortgage repaid by a certain age of the oldest applicant (70 at mBank), so after your forties the maximum term shortens and the repayment rises. What applies to older applicants is covered in Up to what age banks grant mortgages.
When your income isn't enough
This is the most common reason and also the one you can do most about. The bank adds up the repayments on all your loans, the new mortgage included, and compares them with its usual internal threshold of 45 % of net income. That 45 % is not law and banks differ, but the differences between them tend to be a few percentage points, not tens.
Jakub (38) and his four options (net income CZK 52,000, a lease with a CZK 6,500 repayment for another 14 months, wants CZK 4,000,000 over 25 years; annuity repayments at 5.00 %, bank's internal threshold 45 %):
- He may spend CZK 23,400 on all repayments, which leaves CZK 16,900 after the lease. The repayment on CZK 4,000,000 over 25 years is CZK 23,384, so the bank turned him down.
- A 30-year term: repayment CZK 21,473, still over the limit.
- A smaller loan: CZK 16,900 over 30 years supports a mortgage of CZK 3,148,159.
- Waiting 14 months for the lease to end: the full CZK 23,400 covers a loan of CZK 4,358,990 over 30 years. Over 25 years it would be CZK 4,002,805, with no margin at all.
- Adding his partner, with net income of CZK 20,000, as a co-applicant: the limit rises to CZK 32,400, CZK 25,900 after the lease, which supports a loan of CZK 4,824,694 over 30 years without any waiting.
In the end Jakub applied with his partner as co-applicant and got CZK 4,000,000 over 30 years with more than CZK 4,000 a month to spare. Both of them now owe the full amount, though, and that needs talking through before anyone signs. Which other steps raise your creditworthiness, and by how much, is shown in 12 steps to better creditworthiness.
When the valuation or your own funds stopped you
The LTV limit of 80 % (90 % if at least one applicant is under 36) binds every bank, so another bank cannot get round it for you. It can, however, produce a different valuation. Say you are buying a flat for CZK 4,500,000 and it is valued at CZK 4,200,000: the bank lends CZK 3,360,000 and you need CZK 1,140,000 instead of CZK 900,000.
- Show the valuation to the seller. A lower valuation is a legitimate argument for a discount, especially on flats that have been on the market a long time.
- Ask the bank to review the valuation. It helps to supply comparable sales nearby or to correct wrong details about the flat.
- Cover the shortfall with a gift from family or by pledging another property. Using your parents' property as collateral is safer than borrowing your deposit.
When should you try another bank?
Another bank makes sense where internal rules decided the case: the DSTI threshold (40–50 % depending on the bank), how income is calculated for the self-employed and company directors, whether foreign income is accepted, or how tolerant the bank is of an old, minor late payment. It makes no sense for the LTV limit, ongoing enforcement or a fresh serious register record. Every bank will turn you down for those.
Each application is logged in the register as an enquiry. A string of applications within a few weeks looks like hunting for credit at any price and hurts your scoring. Before you apply again, find out how that particular bank treats your specific problem. A mortgage broker knows the methods of several banks and can pick the one where the application will go through, without you trying them one after another. When that pays off is discussed in Mortgage broker or bank.
What to avoid after a rejection
- A consumer loan to fund your deposit. The bank will see it in the register, count its repayment and give you a smaller mortgage, not a bigger one.
- Offers of a “mortgage with no register check”. Non-bank lenders also need a ČNB licence and must assess creditworthiness (§ 86 of the Consumer Credit Act). Anyone lending regardless of income is counting on selling the collateral.
- Hiding a debt or doctoring documents. A mismatch with the register damages the application more than the debt itself.
- A non-refundable deposit. Sign a reservation agreement without the option of getting the deposit back only once your mortgage is pre-approved.
A plan for the next 6–12 months
Straight after the rejection, request your reports from the BRKI, NRKI and SOLUS registers and check what the bank saw. Cancel unused credit cards and overdrafts. The bank counts them even if you owe nothing on them.
Over the following months, finish your probation period, pay off small loans and save regularly, because your account history shows what repayment you can manage. Self-employed applicants with a low tax base need another tax return, so the realistic horizon is a year. With a register record, follow Mortgage with a credit register record; with enforcement or insolvency, Mortgage and enforcement or insolvency.
Sources
- Act No. 257/2016 Coll., on consumer credit, § 86 (creditworthiness assessment) and § 89 (information when credit is refused)
- ČNB – Setting upper limits on the LTV, DSTI and DTI credit ratios
- ČBA Hypomonitor – average rate on new mortgages, August 2026