Hypothecary credits in Czechia
The general information

• Citizens of the foreign states which are not entering into EU, can get the real estate in the Czech republic only on the Czech legal body.
• Hypothecary crediting can be given to the foreigners getting the real estate on such legal body, founded only for this purpose.
• the Maximum sum of the credit can make to 85 % of cost of the real estate.
• Mortgages have the fixed interest rate (with the fixed term of fixation of the rate from 5 till 30 years to a choice).
• Term of repayment of the hypothecary credit can make from 5 till 30 years.

Real estate purchase

• the Foreigner has the right to get the real estate only on the Czech commercial company which owner it can be.
• the Similar company can be based only for the purposes of acquisition of the real estate and has no right to conduct any other activity - so-called SPV.

The general information on mortgages

• At registration of any hypothecary credit the bank requests the following information:

Corresponding maintenance:

- The real estate intended for residing, being in a personal property (it is impossible to put the real estate which is in co-operative possession or a trading share in the company, the owning real estate)
- Without îáðåìåíåíèÿ
- The having bank estimation of market cost defining the sum of maintenance, for calculation of the size of the credit

Data on the applicant:

- Constant stable personal incomes.
- Local banks take into consideration only the wages received in a place of work. It is required to present acknowledgement of the employer on the size of wages to bank (on the special bank data card) and extracts from the bank bill for last 6 months reflecting payment of the salary. The bank also quite often asks to present a copy of the labour contract with transfer into the Czech language.

• the Size of the credit

- Banks grant the loan in the size corresponding to an expert estimation of the real estate, instead of its market (purchased) price.
- As a rule, banks are conservative enough in the estimations, therefore the expert estimation of the real estate can be more low its purchase price.
- On the basis of it banks are ready to grant the loan at a rate of 85 % of estimated cost of the real estate.
- Thus, the sizes of the credit make approximately 70-85 % from a real estate purchase price.

• Repayment, percent

- The Czech banks offer the fixed interest rates on which the percent is fixed, as a rule, for the term of 3-15 years. However the rate can be fixed and for all period of repayment of the credit (till 30 years).
- Now interest rates make about 6,5 %.
- Usual term of repayment of the credit makes 5-30 years.

• Payments

- The extraordinary payment or full repayment of the credit can be made without imposing of penal sanctions only at the moment of new fixation of size of the interest rate. If preschedule repayment occurs in action of the fixed interest rate the bank on the client imposes penal sanctions (can reach 10 % of the sum of preschedule repayment).
- We will give an example: the Client has issued the mortgage with term of repayment of 10 years, the interest rate size is fixed for 3 years. The client can extinguish completely the credit in 3 years.

• Process of delivery of the credit

- The credit sum can be paid bank after signing credit contracts.
- Also the credit sum can be brought on the notarial deposit and is unblocked only after check in of the new owner in a real estate cadastre.