Early mortgage repayment in the Czech Republic, when it is free and how much the bank can charge

You can repay your mortgage early at any time, in full or in part. This is guaranteed by Section 117 of Act No. 257/2016 Coll., on Consumer Credit (zákon o spotřebitelském úvěru). Repayment is free at the end of the fixed-rate period (fixace), up to 25% of the loan amount in the month before the contract anniversary, when you sell the property after 24 months from signing, and in several life situations. Otherwise the bank may only ask for compensation of reasonably incurred costs (náhrada účelně vynaložených nákladů). For a purpose-bound housing mortgage under the new regime, this is at most 0.25% of the repaid amount for each started year until the end of the fixed-rate period, 1% at most in total.

The actual compensation is often lower than the cap, because the law ties it to the difference between your rate and the average published by the Czech National Bank (Česká národní banka, ČNB). If your rate under the new regime is lower than today’s average of 4.8 to 4.9%, you pay at most documented administrative costs of up to 1,000 CZK (about 46 USD), often nothing. The rules in this article apply as of 2 October 2026. The amendment made by Act No. 159/2026 Coll., effective from 1 January 2027, does not change them.

When you can repay your mortgage early for free

Early repayment of a mortgage is free in the seven situations listed in Section 117(3) of the Consumer Credit Act that apply to mortgages. In these situations the bank may not ask for any compensation of costs, not even an administrative fee. This applies to full repayment as well as to an extra payment (mimořádná splátka).

Sale of the property and settlement of community property were added to the free cases by the amendment made by Act No. 462/2023 Coll., effective from 1 September 2024. For mortgages not yet covered by the new rules, the bank may charge up to 1% of the repaid amount on a sale, at most 50,000 CZK (about 2,300 USD).

At the end of the fixed-rate period you repay for free within three months of the bank’s offer

Repaying a mortgage at the end of the fixed-rate period is free within 3 months of the bank telling you the new interest rate (Section 117(3)(d)). You can repay the whole loan or any part of it, the 25% limit does not apply here. The bank must send you the offer with the new rate and payment no later than 3 months before the fixed-rate period ends (Section 102(3)).

So the window runs from the bank’s notice, not from the date the fixed-rate period ends. If the offer arrives exactly 3 months in advance, the free window closes at roughly the same time as the old fixed-rate period. If you wait for the first payment at the new rate, you may miss it.

That is why the end of the fixed-rate period is the most common time for a larger extra payment, full repayment or refinancing with another bank. How the fixed-rate period is agreed and how long it usually lasts is covered in the article on conditions for getting a mortgage.

Once a year you can repay a quarter of your mortgage for free before the contract anniversary

Once a year you can repay up to 25% of the total mortgage amount without a fee if you send the money within 1 month before the anniversary of signing the loan agreement (Section 117(3)(h)). This applies even in the middle of a fixed-rate period. The basis is the total loan amount, meaning the sum the bank made available to you, not the current balance.

With a 4,000,000 CZK (about 180,000 USD) mortgage, you can therefore repay up to 1,000,000 CZK (about 46,000 USD) free of charge in this month, even if you only owe 3,200,000 CZK (about 150,000 USD). If you send 1,200,000 CZK (about 55,000 USD), the bank may not charge compensation on the first million. On the remaining 200,000 CZK (about 9,200 USD) it can calculate compensation under the normal rules and caps.

What counts is the anniversary of signing the contract, not the anniversary of the fixed-rate period or of drawing the loan. You will find the date in your contract, and it is worth confirming it with the bank before you send the money.

How much the bank can charge for early repayment during the fixed-rate period

Outside the free situations, the bank may only ask for compensation of reasonably incurred costs (Section 117(2)). The law makes no provision for a contractual penalty or any other sanction for early repayment. Under the new regime, three caps apply at once to loans for buying, building, renovating or refinancing housing and to a building savings loan (úvěr ze stavebního spoření), and the bank may ask for the lowest of them.

• 0.25% of the amount repaid early for each started year until the end of the fixed-rate period, 1% at most (Section 117(4)).
• The interest you would have paid on the repaid amount until the end of the fixed-rate period (Section 117(5)).
• Reasonably incurred costs calculated under Section 117a, that is administrative costs of up to 1,000 CZK (about 46 USD) plus the interest rate difference.

A different cap applies to a loan that is only secured by property and has no specified purpose (Section 2(2)(a)), known on the market as an American mortgage (americká hypotéka). For this loan, compensation may reach 1% of the repaid amount if more than a year remains until the end of the loan, otherwise 0.5%.

How the bank calculates compensation and which ČNB rate it uses

Under Section 117a, compensation for early repayment is calculated as the sum of administrative costs, at most 1,000 CZK (about 46 USD), and the interest rate difference. The interest rate difference is the interest you would pay until the end of the fixed-rate period at your rate, minus the interest at the ČNB average rate for comparable mortgages. Both calculations use the same monthly payment as in your contract.

The ČNB publishes the averages every month by the 10th, always covering three months of newly agreed loans. It splits them by loan type, security by property and length of the fixed-rate period. The average published in the month before the repayment date is used, for the group matching the time left until the end of your fixed-rate period. For a partial repayment, the difference is reduced in the ratio of the repaid amount to the balance.

The values apply to purpose-bound mortgages secured by property agreed from May to July 2026 and are used for repayments in October 2026 (ČNB ARAD, data set 1207). If you repay in a different month from the one in which you notified the bank of your intention, the preliminary statement uses the average published in the month before your notice (Section 117(7)). The final amount may then differ slightly.

The calculation leads to a simple rule. If your rate is lower than the ČNB average for the remaining fixed-rate period, the interest rate difference is negative. The law only works with a positive sum, so the compensation is zero, or at most the documented administrative costs of up to 1,000 CZK (about 46 USD).

Model calculation, what an extra payment of one million costs

In the model, you are repaying a 3,000,000 CZK (about 140,000 USD) mortgage over 30 years with a five-year fixed rate from November 2024 to November 2029. In October 2026, after 23 payments, you send an extra payment of 1,000,000 CZK (about 46,000 USD) outside the anniversary window. There are 37 months left until the end of the fixed-rate period, that is 4 started years, and the ČNB average for the 3 to 5 year group, 4.82%, is used.

The calculation assumes a monthly annuity payment and monthly interest of 1/12 of the annual rate. Interest until the end of the fixed-rate period is calculated at the contract rate and at the ČNB average, both with the same payment, and the difference is reduced by the ratio of 1,000,000 CZK (about 46,000 USD) to the balance. At 5.2%, the reasonably incurred costs come to 13,299 CZK (about 610 USD), but the bank is stopped by the 1% cap, that is 10,000 CZK (about 460 USD). At 4.4%, the mortgage is cheaper for the bank than today’s market, the difference is negative and the compensation is zero.

If the same client sent 750,000 CZK (about 34,000 USD) in the month before the contract anniversary, that is 25% of 3,000,000 CZK (about 140,000 USD), they would pay nothing in either scenario. The compensation has to be weighed against the interest you save. A million repaid at 5.2% saves roughly 52,000 CZK (about 2,400 USD) in the first year, at 4.4% roughly 44,000 CZK (about 2,000 USD). How interest is calculated is explained in the article how to calculate interest.

For older mortgages the new rules only apply from the next fixed-rate period

The 0.25% per year cap and the calculation based on the ČNB average apply to mortgages agreed from 1 September 2024. Older fixed-rate mortgages switch to the new regime only on the day a new fixed-rate period starts after 1 September 2024 (Act No. 462/2023 Coll., Article XV, and ČNB opinion RS2024-38). What counts is the start of the fixed-rate period, not the date the contract was signed.

Until then, the original wording of the law applies and the bank may only ask for administrative costs that are demonstrably connected with the repayment. That is how the ČNB interpreted it in its opinion from March 2019. Lost interest income and the bank’s refinancing costs do not belong here. The original wording has no percentage cap for mortgages, the compensation is capped from above by the interest until the end of the fixed-rate period.

The exception is the sale of the property. Under the old regime, compensation for it may reach 1% of the repaid amount, at most 50,000 CZK (about 2,300 USD), if the contract has been in place for more than 24 months. The end of the fixed-rate period, 25% at the anniversary, death, illness or disability were already free under the original wording.

Five-year fixed rates from the record mortgage year are ending and payments are rising by tens of percent

If your five-year fixed rate from 2021 ends in 2026, you can repay any amount without compensation within 3 months of the bank’s offer. With the new fixed-rate period, the mortgage switches to the new regime with the 1% cap. At the average rate from 2021 and today’s average refixing rate, the payment comes out roughly 30% higher, so a free extra payment has the biggest effect right now.

In 2021, banks and building savings banks (stavební spořitelny) provided new mortgages, excluding refixing and refinancing, worth 367.9 billion CZK (about 17 billion USD), the most for any full year in the ČNB series since 2014. Loans with a 3 to 5 year fixed rate made up 146.8 billion CZK (about 6.7 billion USD) of this, with a weighted average rate of 2.32%. In August 2026, the average rate on new agreements, mainly refixings, with a 3 to 5 year fixed rate was 4.75% (ČNB ARAD, data set 1147).

A 3,000,000 CZK (about 140,000 USD) mortgage over 30 years agreed in 2021 at 2.3% had a monthly payment of 11,544 CZK (about 530 USD). After five years, 2,631,953 CZK (about 120,000 USD) remains, and at 4.75% for the remaining 25 years the payment comes to 15,005 CZK (about 690 USD), which is 3,461 CZK (about 160 USD) or 30% more.

What to do if you want to repay your mortgage early

Before making an extra payment, ask the bank for a statement of the amount due (vyčíslení). Under Section 117(6), the bank must give it to you without undue delay, broken down into principal, interest and other costs, with the expected compensation, the assumptions behind its calculation and information on when repayment is free.

1. Find the signing date in your contract, which is what the anniversary for the 25% is counted from, and the date the fixed-rate period ends.
2. Find out when your latest fixed-rate period started. A start before 1 September 2024 means the old regime, a later start means the new one.
3. Under the new regime, compare the compensation in the statement with the cap of 0.25% for each started year, 1% at most.
4. Look up the ČNB average for the remaining fixed-rate period. If it is higher than your rate, the compensation should be zero, or at most administrative costs of up to 1,000 CZK (about 46 USD).
5. If you can, send the money in a free window, that is within 3 months of the new rate offer or in the month before the contract anniversary.
6. After full repayment, ask for a confirmation of repayment and consent to the deletion of the lien (zástavní právo). An application for deletion from the Land Registry (katastr nemovitostí) costs an administrative fee of 2,000 CZK (about 92 USD) (Czech Office for Surveying, Mapping and Cadastre, ČÚZK).

If you deduct mortgage interest from your tax base, your deduction will be smaller after an extra payment, because you will pay less interest. This belongs in the comparison with other uses of the money, just like the reserve you will have left after the payment.

USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK per USD on 2 October 2026.