New regulations starting this April


At the beginning of April, new limits for mortgage loans entered into force. Having regard to the Act No. 6/1993 Coll., On the Czech National Bank (CNB), the CNB is entitled to regulate the parameters for the provision of mortgages. Banks are now obliged to comply with the new limits for DTI, DSTI and LTV parameters when evaluating mortgage applicants. Different limits apply to applicants over the age of 36, while less stringent conditions apply to applicants under the age of 36.

The DTI, DSTI, and LTV parameters express the following:

  • The DTI (debt-to-income) indicator expresses the total amount of debt expressed in multiples of the applicant's net annual income.
  • The DSTI (debt service-to-income) indicator expresses the total amount of monthly debt payments to the total amount of the applicant's net monthly income.
  • The LTV (loan-to-value) indicator represents the ratio of the loan amount and the value of the purchased property.

The new indicators are set differently for the two groups of applicants. The age of the applicant will be decisive, while more favorable conditions will apply for applicants under the age of 36. The following limits will apply to applicants over the age of 36:

  • DTI at 8.5
  • DSTI at 45%
  • LTV up to 80%

For applicants under the age of 36, the limits will be as follows:

  • DTI at 9.5
  • DSTI at 50%
  • LTV up to 90%
The situation created by the introduction of new parameters may be favorable for younger applicants, not only because of the higher limits. The same interest rates for the 80 LTV and 90 LTV loans are now available on the market. Previously, 90 LTV of mortgages used to be more expensive than 80 LTV mortgages. Although older applicants are currently unable to apply for 90% of mortgages, for younger applicants, rates for 90 LTV mortgages have fallen to the level of 80 LTV mortgages.