Down payment (akontace)
Akontace in English is a down payment: the part of the price you pay from your own money; for a Czech mortgage at least 20 % of the bank's valuation, 10 % under 36. That follows from the ČNB's binding LTV limit of 80 %, or 90 % if at least one applicant is under 36, and the bank wants proof of the down payment before drawdown.
Example
Take a flat priced at CZK 5,000,000 and valued at the same amount. At 80 % LTV the bank lends CZK 4,000,000 and the down payment is CZK 1,000,000. An applicant under 36 can borrow CZK 4,500,000 and needs only CZK 500,000. The larger loan shows up in the payment, though: at 5.00 % over 30 years you pay CZK 24,157 a month instead of CZK 21,473.
In practice
Banks work out the down payment from the valuation (odhad), not from the purchase price. If the valuation comes in, say, CZK 300,000 lower, you make up the gap yourself. Savings, building savings, a gift from your parents and a reservation fee or advance payments already made to the developer all count, provided you can back them with a bank statement or an invoice. A common slip is paying an advance in cash and getting no receipt the bank will accept.
How it differs
For mortgages, akontace and own funds mean the same thing; akontace is simply a casual word borrowed from leasing and hire purchase. LTV describes the other side of the same equation, the loan as a share of the property's value. An LTV of 80 % equals a 20 % down payment when the valuation matches the purchase price.
Frequently asked questions
What is akontace (down payment) on a Czech mortgage?
The share of the price you pay from your own money because the mortgage does not cover it. For mortgages, akontace means the same as own funds (vlastní zdroje).
How big a down payment does a Czech mortgage need?
At least 20 % of the bank's valuation, or 10 % if one applicant is under 36. On a CZK 5,000,000 flat valued at its price that is CZK 1,000,000, or CZK 500,000 under 36, plus the costs of buying.
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