Collateral value (zástavní hodnota)
The amount the bank assigns to a property as security for the loan. It starts from the bank's valuation of the usual (market) price, which the bank may trim further under its internal rules. The LTV, and with it the maximum mortgage, is calculated from this figure: the binding ČNB limit is LTV 80 %, or 90 % if at least one applicant is under 36.
Example
A flat costs CZK 5,200,000, but the valuer puts its collateral value at CZK 5,000,000. At LTV 80 %, the bank lends at most CZK 4,000,000, not 80 % of the purchase price (CZK 4,160,000), so the buyer needs own funds of CZK 1,200,000 instead of CZK 1,040,000. On CZK 4,000,000 over 25 years at 5.00 %, the payment is CZK 23,384.
In practice
The bank orders the valuation, which usually costs CZK 3,000–6,000; for flats many banks do it online cheaply or for free. If the collateral value comes out low, try another bank's valuer or offer additional collateral in the form of another property. Avoid signing a reservation agreement with a short deadline before you know what figure the valuer will put on the property.
How it differs
Neither the purchase price nor the property valuation (odhad) is the same thing: the valuation is a document, and the collateral value is the number the bank works with, which may sit below the estimated market price. An expert opinion (znalecký posudek) is a different document again, prepared by a court-registered expert under Act No. 254/2019 Coll.
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