Mortgages and financing

LTV (loan-to-value)

In Czech: LTV

LTV (loan-to-value) is the ratio of the loan amount to the value of the collateral, i.e. the pledged property. It decides how much of a purchase a mortgage can cover and how much you must pay yourself.

Also called: loan-to-value ratio, LTV ratio

What it means

LTV stands for loan-to-value. The Czech National Bank (Česká národní banka, ČNB) defines it as the ratio of the loan amount to the value of the collateral (hodnota zajištění). The higher the LTV, the larger the share of the purchase the bank finances and the less of your own money goes in.

Czech mortgage offers use the abbreviation as it is, LTV, always as a percentage. Banks use it to decide whether to lend at all and may also tier the loan terms by it.

How it works in the Czech Republic

Credit ratios are calculated under ČNB Decree No. 399/2021 Coll. (vyhláška ČNB č. 399/2021 Sb.). The bank sets the collateral value on the basis of a property valuation (odhad nemovitosti); ask your bank how it arrives at the figure.

As of October 2026 the binding upper limit set by the ČNB is an LTV of 80%. For applicants under 36 buying their own home it is 90%. The ČNB board left these settings unchanged at its meeting on 4 June 2026, but they can change in the future.

For investment mortgages, which means loans for a third or further residential property or for a property meant for renting out, the ČNB has recommended since 1 April 2026 an LTV of no more than 70%. It is a recommendation, not a binding cap; ask the bank whether and how it applies it.

Practical example

For example, a flat with a collateral value of CZK 4,500,000 and a loan of CZK 3,600,000 give an LTV of 80%. If the applicant's parents also pledged their cottage and the total collateral value rose, the same loan would mean a lower LTV and the applicant might need less cash of their own.

What to watch out for

  • LTV is calculated from the collateral value, which need not equal the purchase price.
  • Check with the bank whether you meet the conditions for the 90% limit for under-36s, especially with a joint application.
  • If you are buying to let, expect that the bank may apply the stricter recommendation for investment mortgages.
  • Pledging an extra property lowers the LTV, but the bank can also recover the debt from that property if you stop paying.

Frequently asked questions

What is the maximum LTV in 2026?

As of October 2026 the ČNB binding limit is 80%, or 90% for applicants under 36 buying their own home. For investment mortgages the ČNB has recommended at most 70% since 1 April 2026.

Is LTV based on the purchase price?

The ČNB defines LTV as the ratio of the loan to the value of the collateral. The purchase price and the collateral value can differ, so ask the bank which figure it will work with.

Is the 70% limit for buy-to-let compulsory?

No. It is a ČNB recommendation in effect from 1 April 2026, not a binding limit, but the bank may follow it, so plan with it in mind.

  • Mortgage (hypotéka)A mortgage (hypotéka) is a long-term housing loan secured by a lien on a property. The borrower repays it in regular monthly instalments, usually over many years.
  • Property valuation (odhad nemovitosti)A property valuation (odhad nemovitosti) is an assessment of a flat, house or plot that a bank relies on when deciding on a mortgage. It is used to set the collateral value and thus how much the bank will lend.
  • Appraised value (odhadní cena)Appraised value (odhadní cena) is the value a valuer or court expert sets for a property for a specific purpose, most often for a bank granting a mortgage. It can differ from both the purchase price and market value.
  • Applicant creditworthiness (bonita)Applicant creditworthiness (bonita) is a borrower's ability to repay a loan properly and on time. A bank assesses it from income, expenses, existing debts and payment history before deciding on a mortgage.
  • Buy-to-let flat (investiční byt)A buy-to-let flat (investiční byt) is a flat bought mainly to rent out or to preserve the value of money, not to live in. Its return depends on the price, rent, running costs, taxes and financing.

Sources

Laws and official pages this text is based on (in Czech).

This text is for information only and has not yet been checked by a legal or financial expert. It is not legal, tax or financial advice. Verify important details in the listed sources or with a professional.

Updated 25 October 2026

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