European mortgages explained: Czech Republic

About Czech Republic

The Czech Republic ia a state in Central Europe. It is a landlocked state of 78,870 km2. It is bordered by Germany, Austria, Poland and Slovakia. The capital city is Prague. The Czech Republic is a market economy country that belongs to the highly developed countries of the world, according to economic, social and political indicators. Economically it belongs to the world’s 31 riches nations with the highest financial incomes, according to the World Bank. The unemployment rate has been low for a long time and below the average for developed countries.

History of the Czech Republic

Czech Republic was first populated by Celts 4th century. In 863, the Byzantine missionaries Constantin and Methodius come to the part of the present-day Czech Republic and introduced Slavic liturgy there. The defeat of Austria-Hungary in World war 1 cleared the way for the foundation of an independent state of Czechoslovakia, which was founded on October 28, 1918. The first president of Czechoslovakia was Tomáš Garrigue Masaryk. On January 1, 1993, Czechoslovakia was divided into two independent states: Czech Republic and Slovak Republic. In the following years, the Czech Republic joined the OECD, the NATO and the EU.

Czech Republic and mortgage

A fifth of Czechs have a mortgage and another 10 % plan to take it, especially for their own housing purposes. They are mainly decided by the level of inteerest rates, the APR and the financial advisor’s recommendations. The amount of the mortgage is most often in the range of one to two million crowns, and the repayment period is chosen by Czechs for more than 20 years. One of the parameters that influence the length of the agreed mortgage term is its amount. The higher the mortgage loan the applicant takes out, the more likely they are to spread the repayments over more years so as not to over-burden their family budget. The Czech National Bank has determined that the monthly payments af all the applicant’s loans must not exceed 45 % of his net monthly income. Own resources to obtain a mortgage are most often dealt with by Czechs in the form of savings or building savings. 34 % of Czechs consider a serious long-term illness or death, to be the biggest risk that could threaten their ability to pay their mortgage. Another significant risk is losing your job and breaking up. Czechs také possible risks associated with mortgage credit.

Digital mortgage

Only 13 % of Czechs would prefer to take a mortgage online. Czechs are a conservative nation and they are must get used to news first. They need to consult and compare the merits of each offer with each other, so they are behind a banker or a financial adviser. At the moment, the process being revived so that it can work in a hybrid way. So that all the steps of arranging a mortgage can be carried out online, but at the same time the process goes the traditional way.

Loan system

Czech banks provide loans from domestic savers‘ deposits and do not need financing from abroad. The loan-to-deposit ratio of the Czech banking sector is currently 73 %, among the lowest in the European Union. Czech banks are mostly net creditors of the European banking groups that own most Czech banks. The domestic banking sector as a whole has a positive net external position af around 6 % of GDP.

Point Of Sale systems

In the current decade, Point of Sale solutions has evolved to keep pace with today’s increasingly demanding and well-informed consumers. If they are unsatisfied with the choices or service levels you offer, they can, with mobile devices in hand, instantly access a limitless set of alternatives. As a result of such extreme competitive pressures, modern POS has evolved far beyond a payment and accounting systém to become not just a point of sale, but also a point of service, driving highly individualized interactions that consistently gratify customers in the moment.


Veronika Pluhackova is a student who interned with Irish Mortgage Brokers in May 2022.

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