Investment mortgage (investiční hypotéka)
A mortgage on a property the borrower will not live in, typically a flat to let or a third or further property. Since 1 April 2026 the ČNB has recommended stricter parameters: LTV no more than 70 % and DTI no more than 7. It is a recommendation, and banks apply it with varying strictness. The interest cannot be deducted from the tax base under § 15. How banks assess it: buy-to-let mortgage.
Example
Picture a two-room flat (2+kk) for CZK 5,000,000, bought to let. At 70 % LTV the bank lends CZK 3,500,000 and your own funds come to CZK 1,500,000. At 5.00 % over 30 years the payment is CZK 18,789. Rent on a 2+kk in Prague runs at roughly CZK 20,000–26,000 a month, so once the repair fund, insurance and void periods are paid, cash flow tends to sit just above zero.
In practice
Banks usually count rental income towards creditworthiness only in part, and for a new flat only once you show a tenancy agreement. You can claim the interest as an expense against rental income under § 9, provided you do not use the 30 % flat rate. What catches people out is taking the loan as an owner-occupier mortgage and then letting the flat: depending on the contract, that can lead to a higher rate or acceleration of the loan.
How it differs
A purpose-bound mortgage for your own home has a binding LTV limit of 80 % (90 % under 36) and qualifies for the interest tax deduction. An American mortgage is non-purpose, while an investment mortgage finances a property meant to earn money. Whether the purchase pays off is shown by the net yield.
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