Mortgages in the Czech Republic Become More Expensive: Interest Rates Rise to 5.79%

Mortgage interest rates in the Czech Republic have been rising steadily for more than six months. For property buyers, this means significantly higher monthly mortgage repayments. At the same time, apartment rents in Prague continue to rise.

Anyone looking to finance a property in the Czech Republic increasingly has to dig deeper into their pockets. According to the latest Swiss Life Hypoindex, the average advertised mortgage interest rate reached 5.79 per cent in October. Compared with the same month last year, this represents an increase of 0.88 percentage points.

Particularly in Prague, where property prices have been high for years, even relatively small increases in interest rates can make financing considerably more expensive.

Almost CZK 6,000 More Per Month

A model calculation by Prague property developer Central Group illustrates the impact of rising interest rates. It assumes a mortgage loan of CZK 10.5 million for a new 70-square-metre apartment. This corresponds to around 80 per cent of the average asking price for such a property.

Photo: Tierra Mallorca | Unsplash

With a 30-year mortgage term and an interest rate of 4.91 per cent in October 2025, the monthly repayment was approximately CZK 55,900. At the current interest rate of 5.79 per cent, this rises to around CZK 61,600. Buyers therefore have to pay around CZK 5,700 more per month for the same loan than they did a year ago. Fees and insurance are not included in the calculation.

Apartment Rents in Prague Are Also Rising

Property buyers are not the only ones affected by rising housing costs. Apartment rents in Prague have also increased significantly in recent years. According to property portal Sreality.cz, advertised rents in the capital have risen by around 60 per cent over the past five years.

Photo: IPR Praha

Housing Construction Remains a Key Challenge

Alongside financing costs, the limited supply of housing is considered one of the biggest problems facing the Czech property market. According to a survey commissioned by Central Group, 49 per cent of respondents regard the lack of affordable housing as the biggest problem in the Czech Republic. In Prague, this figure is even higher, at 54 per cent.

Central Group sees new housing construction as an important part of the solution. The company plans to complete 1,600 apartments this year. In the coming months, projects involving more than 2,000 additional apartments at seven locations in Prague are also set to get under way.

The property developer is also pinning its hopes on the planned reform of the Czech Building Act and Prague's new Metropolitan Plan. According to the company, both could significantly facilitate housing construction in the capital.