In early 2021, a young couple in Prague signed a mortgage at 1.99 percent. They picked a five-year fix because it felt safe, the news was talking about inflation but rates were still cheap, and they wanted to lock things down before their daughter was born. Five years later, the email from their bank arrives. The fixation ends in early 2026. The new offer sits between 4.5 and 5 percent.
This is happening to tens of thousands of Czech households this year. The 2020 to 2021 cohort, the people who fixed during the historic low-rate window of 2020 to 2021, are coming up for renegotiation across all of 2026. The rate gap is the largest most refixers have ever faced. And many of them have not done the math yet.
Meet Marek and Jana (a real-shape scenario)
The 2021 fix
Marek and Jana bought a two-bedroom flat in Vinohrady in February 2021 for 7,200,000 CZK. They put down 20 percent (1,440,000 CZK), borrowed 5,760,000 CZK, and fixed at 1.99 percent for 5 years over a 30-year amortization. According to Czech Banking Association data, the average mortgage rate in early 2021 sat between 1.95 and 2.05 percent, among the lowest ever recorded in the Czech market.
Original payment: ~21,256 CZK / month Rate: 1.99% Fix ends: February 2026The 2026 refix
By February 2026, their remaining principal is approximately 5,150,000 CZK. The bank's renewal offer comes in at 4.7 percent over 5 years, on the remaining 25-year term.
New payment: ~29,200 CZK / month Rate: 4.7% Increase: +7,944 CZK / monthThat is a 37 percent jump in monthly payment. Annualized, it is around 95,000 CZK extra out of their household budget. Nothing about their flat changed. Their salaries went up over five years, but probably not by 95,000 CZK net.
Marek and Jana are not unusual. According to the Czech Banking Association's Hypomonitor, the average rate on new mortgages was 4.48 percent in late 2025, with current 3-year fixed offers reported between 4.39 and 4.59 percent and the broader Swiss Life Hypoindex tracking around 4.9 percent. Mortgage rates are expected to climb further across 2026, with banks' borrowing costs hitting two-year highs.
Why this is happening to so many people at once
Two things converge in 2026. First, the 2020 and 2021 origination wave was huge. Czech mortgage volumes peaked during those years as rates dropped below 2 percent for the first time in living memory. Second, five-year fixations were the most popular choice during that wave, partly because banks were marketing them aggressively and partly because borrowers viewed them as "safe."
Five years later, those fixations all expire roughly in 2026. Anyone who refixes at current market rates faces an immediate payment increase. The size depends on their original rate, current outstanding principal, and the new rate the bank offers, but increases of 30 to 80 percent on the monthly payment are common across this cohort.
Quick rule of thumb. If your fixation ends this year and your original rate was below 2.5 percent, your new payment will likely be 25 to 40 percent higher. If your original rate was below 2 percent, expect 35 to 50 percent higher. Run the actual numbers with our mortgage calculator.
The four-step refix playbook
1. Start three to six months before your fix ends
Banks typically send their renewal offer three months before the fixation expires. Many will engage in conversation six months out if you ask. The earlier you start, the more leverage you have. Last-minute negotiation rarely produces the most competitive rate because you have no time to walk away.
Pull up your loan agreement and check the exact end date of your current fixation. That is your reference point. Six months before that date is when you should be reaching out to your existing bank and to two or three competitors.
2. Get competing offers, not just your bank's renewal
Your existing bank will send you a renewal offer, often the standard rate card with no discount applied. They are counting on you accepting it because switching feels like effort. Most borrowers do exactly that, which is why banks bother making mediocre offers in the first place.
The leverage move is to get two to three written offers from competitor banks. Show those to your existing bank and ask them to match or beat. In a healthy share of cases, the existing bank will improve their rate by 20 to 50 basis points just to retain you. That is 20,000 to 50,000 CZK per year saved on a 5 million CZK mortgage.
3. Decide whether to actually switch banks
If your current bank refuses to match competitive offers, switching banks is straightforward. The new bank pays off your existing loan and originates a fresh mortgage. This is called refinancing.
The mechanics are simple. The catch is the cost stack. Refinancing usually involves a new appraisal (5,000 to 10,000 CZK), a small notary fee (1,000 to 3,000 CZK), and sometimes a small one-time charge from your new bank. Total upfront cost is typically 6,000 to 15,000 CZK. If switching saves you 1,000 CZK per month or more, it pays back inside 6 to 15 months.
4. Choose your new fixation period carefully
The 5-year fixation is still the most popular choice but it is not automatically the best one in 2026. With the Czech National Bank holding rates at 3.5 percent and inflation back near target, the rate environment is more uncertain than it was a year ago. Some borrowers are choosing 3-year fixations to keep options open if rates fall. Others are choosing 7- or 10-year fixations to lock in current rates if they expect rates to rise further.
The general rule is straightforward. Shorter fixations cost slightly less but reset more often. Longer fixations cost slightly more but give you certainty. There is no "right" answer that applies to everyone. The right answer depends on your view of where rates will be in 5 years and how much volatility you can tolerate.
Three traps to avoid
Trap 1: Accepting the renewal offer without negotiating. Banks bake in margin on automatic renewals. Almost everyone qualifies for a better rate than the first offer. Always counter, even if you are happy with the bank.
Trap 2: Choosing the longest possible fixation just because rates feel high. Locking in for 10 years at today's rate makes sense only if you are confident rates will keep rising. If rates fall, you are stuck. The middle path (5 years) is usually defensible but should be a deliberate choice, not the default.
Trap 3: Ignoring your monthly budget impact. If your payment is going up by 8,000 CZK per month, that has to come from somewhere. Cutting savings is a common reflex but a bad one because it leaves you exposed. Work the new payment into your budget for three months before your fix ends so the change is not a shock.
What to do this week
Pull your loan agreement. Find the exact fixation end date. If it is in 2026, mark a reminder six months before that date. Run our mortgage calculator with current rates (4.5 percent for a baseline, 4.7 percent for a stress test) on your remaining principal to see what your refix payment looks like.
If the new payment is workable, fine. Start the negotiation process at the right moment. If the new payment looks tight, you have time to plan: reduce other expenses, refinance to a longer term, or talk to an advisor about restructuring options. None of this is panic. It is just math you want to do early rather than late.
Frequently asked questions
Take the next step
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Let's TalkAbout the author: Nicolas Griss is the co-founder of Profi Expats, a team of CNB-registered financial advisors helping expats in Czech Republic since 2017. He specializes in pension planning, investments, and mortgages for the international community in Prague.