Loans for foreigners

Hello and welcome to my new blog article. Today I'm going to cover the basic questions that foreigners ask when they want to get a mortgage in the Czech Republic. Nowadays, getting a mortgage is a common thing for foreigners, but there are still questions about the conditions and possibilities of getting a mortgage. In this article we will try to answer the most common questions that foreigners ask.

First of all, it is important to mention that there are no clear-cut rules that the client must meet in order to obtain a mortgage. The client is always assessed individually according to several factors at the same time. Factors that influence whether a foreigner will obtain any financing at all include: country of origin, type of residence in the Czech Republic, income level, country of origin of income, means of livelihood, repayment period, amount of money required and guarantor

In this article we will focus on the answers to the following questions:

• what conditions must a foreigner meet to obtain a mortgage in the Czech Republic?
• is a mortgage available to foreigners even if I have only a short-term residence in the Czech Republic?
• what factors influence whether I can get a mortgage as a foreigner? 
• what are the most common questions foreigners ask about mortgages in the Czech Republic?

What is the difference between a mortgage for foreigners and a regular mortgage?

A mortgage for foreigners is intended for people who are not citizens of the Czech Republic. Unlike a regular mortgage, there are special conditions and restrictions for foreigners. Banks look more closely at the client's income (from which country the income is paid, in which currency, how long the employment lasts, the structure of the company, etc.). For example, they may ask for a copy of the employment contract.

Who can apply for a mortgage for foreigners?

Foreigners with permanent or temporary residence in the Czech Republic can apply for a mortgage for foreigners. The client should demonstrate the ability to repay the mortgage loan - i.e. have a documented income from employment or business and sufficient own resources

What is the minimum and maximum age for obtaining a mortgage for foreigners?

The minimum age is 18, but some banks may require a higher age. The maximum age varies by bank, usually up to 65 years of age or 75 years of age. Younger clients are at risk of being refused a loan due to a short employment history. Maturity up to 75 years is usually realistic for entrepreneurs, lawyers, and doctors.

What documents do I need to submit when applying for a mortgage for foreigners?

The documents required include proof of identity, income certificate or tax return, copies of passport and permanent residence, and a current or business account statement.

Can a foreigner without permanent residence in the Czech Republic get a mortgage?

Yes, it is possible to obtain a mortgage from some banks even without permanent residence in the Czech Republic. However, other conditions must be met, such as employment with an international company, proof of ability to repay the mortgage, etc. For clients without permanent residence, we offer the "Own home without mortgage" loan

What is the minimum amount of my own financial contribution when applying for a mortgage for foreigners?

The minimum own financial contribution varies depending on the bank and the specific product, but is usually between 10-20% of the property price.

How long does it take to approve a mortgage application for foreigners?

The approval time depends on various factors such as the bank, the complexity of the application and the availability of the required documents. However, it is usually within a few weeks. It is always better to consult your financial situation in advance, to find out your options for obtaining a mortgage.

Can a mortgage for foreigners be used to buy any property in the Czech Republic?

Yes, a mortgage for foreigners can be used to purchase any property in the Czech Republic, including apartments, houses, and even commercial properties. A mortgage loan from a Czech bank, on the other hand, cannot be used to purchase property abroad. The purchase of real estate abroad can be handled with an American mortgage, but the collateral must be real estate in the Czech Republic.

What are the mortgage repayment options for foreigners?

Repayment options vary by bank and product, but common options include monthly, quarterly, semi-annual or annual payments. It is also possible to use a non-bank option in which only the interest is repaid monthly or quarterly.

What happens if a foreigner does not repay the mortgage?

In such a case, the bank may take various measures, such as calling for payment of the amount due, blocking the account or, in the worst case, foreclosing the property. Banks sometimes use a notarial deed for foreigners.

Is it possible to pay off a mortgage for foreigners early?

Yes, it is possible to pay off a mortgage for foreigners early. For banks, early repayment is governed by law, for non-bank loans, early repayment is governed by the terms and conditions.

What are the advantages of a mortgage for foreigners compared to renting?

The main advantage of a mortgage for foreigners is the possibility of owning a property for a long term and paying your own repayments instead of renting. With favourable terms, owning a property can be more economically advantageous. Property prices and rents have been rising steadily over the last 2 years.

Is it possible to refinance a mortgage for foreigners?

Yes, it is possible to refinance a mortgage for foreigners. It can be advantageous if interest rate conditions improve or your financial situation changes. We always help clients find better terms over time and refinance if necessary.

What is the process for applying for a mortgage for foreigners?

The mortgage application process involves filling out a form, submitting the necessary documents and meeting with a bank advisor. This is followed by an assessment of the application and, if necessary, approval of the mortgage.

What are the mortgage insurance options for foreigners?

Mortgage insurance options for foreigners include repayment capacity insurance, property insurance against various risks and credit insurance in the event of death or disability.

What are the costs associated with a mortgage for foreigners?

The costs associated with a mortgage for foreigners include interest, loan arrangement fees, property insurance, and other fees associated with the operation of the loan. There are also legal fees. On average, the entire loan processing costs around CZK 30,000.

What happens if the client loses his/her job while the mortgage is being repaid?

In this case, it is advisable to contact the bank and inform it of the situation. Some banks offer the possibility of deferring repayments or other solutions in case of financial difficulties. In addition to arranging a mortgage or a loan, our services include other financial advice; arranging risk insurance, building and appreciating financial reserves, property insurance and other comprehensive financial services.

Thank you for reading my blog article on mortgages for foreigners. If you are interested in obtaining a mortgage in the Czech Republic, please feel free to fill out the no-obligation loan application below on my website. Our company offers competitive interest rates and individual attention to each client. If you have any questions about mortgages for foreigners, please do not hesitate to contact me. I am here to help you and will be happy to assist you.

Luboš Kolář

+420 734 680 373