Czech property valuation for a mortgage: how the bank values your flat

A buyer agrees a price, signs a reservation and applies for a mortgage. A few days later the bank's valuation arrives, and it is lower than the price. The buyer reads the report twice. How can a flat that two parties agreed on be worth less to a third? The explanation is that the three of them are answering different questions.

This explainer describes what the bank's valuation is for, how it is made and why it can differ from the contract. It quotes no values or rates.

What the valuation is for

The seller and buyer are answering: what will I pay and accept? The bank asks something else. If the borrower stops paying, what could we realistically recover by selling the flat? The valuation is the bank's estimate of that, and it is the basis on which the loan-to-value ratio (LTV) is calculated.

That ratio is not the bank's invention. The Czech National Bank (ČNB) recommends a ceiling of 80% for owner-occupied housing, or 90% for applicants under 36 (as of 2026; check the ČNB), and our explainer on how much deposit you need shows how it translates into cash. For the maximum loan the bank takes the value on its books, which is normally the lower of the price and its valuation. A valuation under the price therefore cuts the loan, and you fill the gap with own funds.

Who values the flat

Practice varies by bank. The valuation may be made by one of the following.

• an independent appraiser or valuation firm appointed by the bank, who visits the flat;
• the bank's own staff, using internal tools and data;
• an automated model, for standard flats, sometimes confirmed by a desk review.

An appraiser may be a court-appointed expert (soudní znalec) or a firm working to the bank's standards. The report is addressed to the bank. As a borrower you often receive a copy or a summary, but you are not the client. This matters when the bank's value is lower than you expected: the bank's valuation is not an opinion offered to you, and you cannot dispute it the way you could a service you ordered. Ask your lender how it handles queries and whether a second valuation is possible.

The fee is normally paid by the borrower, though some banks include it for a promotion or waive it in certain deals. Ask before you apply, since the cost differs from bank to bank and can be due even if the loan is not drawn.

How the value is estimated

Appraisers generally draw on three methods and pick or combine them for the property.

Comparison. The flat is compared with similar flats sold recently in the same area. This is the main method for ordinary flats. Its quality depends on the data: recent sales, real prices rather than asking prices, and truly comparable flats.

Income. Based on the rent the flat could earn, capitalised. It is used for investment property and for flats let to tenants.

Cost. Based on what it would cost to rebuild the property, less depreciation. It matters most for houses and unusual buildings, and less for city flats.

The bank may also set a security value, a more cautious figure than market value, in which it discounts for the risk of a forced or quick sale. Some banks lend against the market value, others against a lower security value. Ask which one your lender uses, because it changes the LTV arithmetic.

Why the valuation can be lower than the price

Several things move the two apart.

1. Negotiating dynamics. A competitive market pushes prices above what the comparables suggest. Appraisers look at past sales, which lag.
2. Condition. A flat needing renovation is valued on its state, and the buyer's plan to renovate does not count.
3. Legal status. An extension or a loggia glazing that is not legalised, a mismatch between the plan and the cadastre, or a cooperative membership instead of title can lower the value or stop a loan.
4. Rights and burdens. A tenant in the flat, an easement or a pre-emption right can reduce the value.
5. The building. Condition of the common areas, the repair fund and planned works in the owners' association (SVJ) matter.
6. Inclusions. If the price includes a car space or furniture, the appraiser may value only what is part of the property.
7. A thin market. For an unusual flat there are few comparables, and the valuation is more cautious.

For a new-build, the bank may value the flat against the developer's price list or its own view of the project, and the bank's loan is released in stages as construction advances. The article on developer payment schedules explains how that interacts with a mortgage.

What a low valuation means in practice

The buyer has three realistic options. First, bring more own funds, so the loan stays at the bank's maximum. Second, renegotiate the price with the seller, using the report. Third, try another bank, whose valuation may differ, bearing in mind that each valuation costs money and a second application is recorded by the lenders involved. Our guide to the mortgage application step by step shows where valuation sits in the sequence, and reservation agreements and escrow shows how to protect a deposit.

You can model the effect with the mortgage calculator on Hypoteky.com: change the loan to the amount the valuation allows and see how the payment moves. For the seller side, a free indicative estimate is available through the valuation service on homerealestate.cz (in Czech), which is useful for a first view and does not replace a bank's report.

How to prepare

A seller or a buyer can improve the odds of a sound valuation.

• Make sure the plan, the cadastre record and the physical layout match.
• Provide the appraiser with the association's papers, the energy certificate and a list of improvements.
• Make the flat accessible for the visit, and tidy.
• If a tenant lives there, tell the appraiser early.

Our article on how to value your flat before selling gives the seller's view, and the legal checks before buying show how to find problems before the appraiser does.

Refinancing and valuations

The valuation is not a one-off. When you refinance with another bank, the new lender will usually value the flat again, since it needs its own security figure. The lower of two values may change your LTV at refinancing, and so the rate band available. See our piece on refinancing.

Frequently asked questions

Why is the bank's valuation lower than the price I agreed?

The appraiser looks at comparable past sales, condition and legal status, and the bank may use a cautious security value. The price may reflect competition or extras.

Who pays for the valuation?

Usually the borrower, though some banks include or waive it. Ask before you apply.

Can I challenge a low valuation?

The report is addressed to the bank. Ask the lender about a review or second valuation, and give the appraiser any missing information.

Is the loan based on the price or the valuation?

Commonly on the lower of the two, with the ČNB loan-to-value ceiling applied to that figure (as of 2026; check the ČNB).

Do I need a valuation if I pay cash?

No bank valuation is needed, but an independent valuation can help you judge the price.

A practical next step

Before you reserve, ask your bank three things in writing: who values the flat and what it costs, whether it lends against market value or a security value, and what happens to the loan if the valuation is lower than the price.

This is a general explainer, not legal, tax or mortgage advice.