Do you dream of owning your own apartment with a sea view, or are you tempted by the idea of a cozy cottage in the heart of the Alps? Whether you’re inspired by the sound of waves or the view of snow-capped peaks, owning property abroad is no longer an unattainable luxury. Thanks to mortgage options available on the Czech market, you can make your dream come true without having to pay the entire amount in cash.

The most common and accessible solution is to use your existing property in the Czech Republic. If you already own one, you generally have two proven paths to choose from.

Cross-Border Mortgage (purpose-specific loan secured by property in the Czech Republic)

The bank provides you with a loan specifically designated for purchasing foreign property, secured by your property in the Czech Republic. The loan amount can reach up to 70% of the collateral value (LTV). The exact amount depends on your creditworthiness and the bank’s conditions.

Example: You wish to buy a cottage in the Tatras for the equivalent of CZK 4,000,000 (€160,000) and you own an apartment in Prague worth CZK 7,000,000 (€280,000). The bank can grant you a loan of up to CZK 4,000,000 (€160,000), as 70% of the apartment’s value (CZK 4.9 million (€196,000)) covers the full purchase price.

Non-Purpose Mortgage (American Mortgage) – Maximum Flexibility

The principle of collateral is the same, but this loan type offers one key advantage – the bank does not require proof of purpose. This gives you maximum freedom. You can finance not only the purchase of a foreign cottage or apartment but also furnishing, renovation, or other investments. The interest rate varies by bank and is often slightly higher. The maximum loan amount can reach up to 75% of the collateral value (LTV). In return, you gain greater flexibility and minimal paperwork.

Example: To buy the same cottage in the Tatras for CZK 4,000,000 (€160,000), you can obtain up to CZK 5,250,000 (€210,000) with a non-purpose mortgage (75% of your Prague apartment’s value). This gives you an extra CZK 1,250,000 (€50,000) that you can use for renovations, furnishings, or even new skis.

Collateral Directly Abroad – Exceptional, but Possible

This option is still rare in the Czech Republic and currently applies mainly to properties in countries such as Germany, Austria, or Slovakia. If your dream property is located there, this may be a great solution. The bank accepts the foreign property you’re buying as collateral. It’s ideal for clients who do not want to encumber their Czech property—or do not own one at all. The loan can reach up to 70% of the property’s value (LTV) and may be granted directly in euros, which eliminates exchange-rate risk for applicants with income in this currency.

Example: For the same cottage in the Tatras priced at CZK 4,000,000 (€160,000), the bank can finance CZK 2,800,000 (€112,000) (70% of the purchase price), and you would pay CZK 1,200,000 (€48,000) from your own funds. Alternatively, the entire loan can be issued in euros—meaning that at a price of €160,000, the loan would amount to €112,000, and repayments would also be made in euros.

How to Decide?

Buying property abroad is a wonderful investment in your quality of life. When choosing a mortgage for foreign property, it’s essential to consider all options and the specifics of your situation. That’s why it makes sense to consult one of our specialists, who will help you find the most suitable solution. A well-chosen financing strategy will save you trouble and allow you to enjoy your second home exactly where you feel best.

Note: All conversions from Czech koruna (CZK) to euros (€) were made using a fixed exchange rate of 25 CZK = 1 EUR.