What to do when your mortgage is rejected — 7 real solutions
Bank rejected your mortgage application? It's not the end of the world. In most cases there's a way to still get a mortgage — at another bank, or with an adjusted strategy. Here are 7 real solutions.
1. Find out the exact reason for rejection
Banks must tell you why they rejected the mortgage. Possibilities:
- Insufficient income (DSTI/DTI) — solution: lower the loan amount, extend the term, find a co-applicant
- Low property value (LTV) — solution: more own funds, different property, different appraiser
- Negative entry in registry — solution: settle debts, wait 5 years
- Unsuitable employment history (few months, low-base self-employed) — solution: wait, different loan type
2. Try another bank
Banks have different internal limits beyond the legal framework. What one rejects, another approves. Try at least 3 banks before saying "I have no chance".
More flexible: mBank, Air Bank, Equa bank (often more flexible with self-employed). Hypoteční banka, ČSOB (better for high LTV).
3. Co-applicant or co-signer
Adding a second person to the application dramatically changes things. The bank sums incomes from both.
- Co-applicant (typically partner) — shares the obligation but also has rights to the property
- Co-signer (parent) — guarantees with their property but doesn't pay installments
Warning: co-signing is serious. If you don't pay, the parent loses their home.
4. Reduce the mortgage amount
If DSTI/DTI stopped you, take a smaller mortgage. Instead of a 6M flat, a 4M flat — less, but realistic. Or: stay in rental for another year, save more own funds, and come back stronger (LTV 70 % instead of 90 %).
5. Cooperative flat (družstevní byt)
Cooperative housing doesn't need a mortgage — you buy a cooperative share, not the property itself. The cooperative (or bank) gives you a loan against the share with more lenient rules.
Pro: less own funds needed. Con: the flat can't be sold as easily (cooperative has pre-emption rights) and banks trust this product less.
6. Pre-financing
Some banks offer a loan for own funds (pre-financing) — a short-term loan to meet the LTV requirement for a mortgage. You incur double obligations and total interest is higher. Use only if you're sure you'll get cash within 1–2 years (inheritance, sale of another property).
7. Improve your standing and try again in 6–12 months
If none of the above works, time to systematically improve your position:
- Pay off small consumer loans (frees up DSTI room)
- Cancel unused credit cards
- Stabilize employment (3–12 months at the same employer)
- Save a consistent amount each month (the bank sees this in history)
- For self-employed: increase tax base by 30 %+ (less optimization = better chance)
Return in 6–12 months with an improved profile.
FAQ
How long does a negative entry stay in the bank registry?
5 years from settlement of the debt. If BRKI or NRKI shows an unpaid loan, mortgage is nearly impossible. Settle debts and wait. Some banks see 7+ year history.
Can I get a mortgage if I have an enforcement (exekuce)?
Active enforcement — no. Closed enforcement — yes, but with time gap (ideally 5+ years). Always disclose enforcement in your application; the bank will find it in the registry anyway.
Is it worth trying a small bank when big ones rejected me?
Yes, try alternative banks (Air Bank, mBank, Trinity Bank). They have more flexible internal rules. But: if 3+ big banks have already rejected you, the problem is usually systemic (DSTI/DTI/registry) and trying another won't help — fix the substance.