Mortgages and financing

Mortgage rate fixation (fixace)

In Czech: Fixace hypotéky

Mortgage rate fixation (fixace) is the period during which the interest rate on a loan stays the same. When it ends, the bank offers a new rate and the borrower decides whether to stay, refinance or repay part.

Also called: fixed-rate period, fixed term, fixace úrokové sazby

What it means

Rate fixation (fixace hypotéky, also fixace úrokové sazby) means the bank and the borrower agree on a fixed interest rate for a set period, for example several years. During that time the monthly payment does not change, even if market rates go up or down.

The fixed period is usually shorter than the whole mortgage term. Over a thirty-year mortgage a borrower therefore goes through several fixed periods, and the rate is reset at the start of each one.

How it works in the Czech Republic

You choose the length of the fixed period when you take out the mortgage, from the options the bank offers. A shorter period gives an earlier chance to change the terms; a longer one keeps the same payment for longer. Nobody knows in advance which will turn out cheaper.

Before the fixed period ends, the bank sends an offer of a new rate; your contract says when. Under the Consumer Credit Act as worded in October 2026, the loan can be repaid without compensating the lender's costs within 3 months of the new rate being notified, which also makes it possible to move to another bank.

You can end the loan at any time during fixation, but the lender is then entitled to compensation of reasonably incurred costs. For housing loans this compensation has been capped since 1 September 2024; see the entry on early mortgage repayment. A change to the Act is scheduled from 1 January 2027, so check the current wording.

Practical example

For example, a couple fixed their rate for five years in 2021. A few months before the end, the bank sent them an offer of a new rate. They compared it with offers from two other banks and refinanced with one of them, because within the period after the new rate was notified they could do so without compensating costs.

What to watch out for

  • Note the date your fixed period ends and start comparing offers well ahead.
  • The new rate from your current bank need not be the best one; you can negotiate with it too.
  • Check in the contract how and when the bank will tell you the new rate.
  • When choosing the length, consider how long you plan to live in the property and whether you might sell it.

Frequently asked questions

How long should I fix the rate for?

There is no universal answer. A shorter fixed period lets you react sooner if rates fall, a longer one protects you if they rise; decide by how big a payment increase you could handle.

What happens if I do nothing about the new rate offer?

The procedure is set out in your loan agreement, so read it. If you do nothing, the loan usually continues at the rate offered.

Can I repay the mortgage at the end of the fixed period without a penalty?

Under the Consumer Credit Act as worded in October 2026, yes: within 3 months of the new rate being notified you can repay without compensating costs. A change to the Act is scheduled from 1 January 2027, so check the current wording.

  • Interest rate (úroková sazba)The interest rate (úroková sazba) is the price of borrowed money, stated as a yearly percentage. On a mortgage it sets how much of each payment goes to interest and is either fixed for a period or variable.
  • Mortgage refinancing (refinancování)Mortgage refinancing (refinancování) means paying off your existing mortgage with a new loan, usually from another bank on better terms. It is typically done when the fixed-rate period ends.
  • Early mortgage repayment (předčasné splacení)Early mortgage repayment (předčasné splacení) means paying off all or part of a loan sooner than the repayment schedule says. The law allows it at any time, but the lender may claim reasonably incurred costs.
  • RPSN (annual percentage rate of charge)RPSN (roční procentní sazba nákladů) is the Czech annual percentage rate of charge: the total cost of a consumer loan expressed as a yearly percentage of the loan amount, including fees, not just interest.

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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