Let me be clear from the start: I did not predict anything. I did not know rates would shoot up, and anyone who claims they knew is telling the story with hindsight. All I knew was that two percent is a historically very low figure, and that a fixed-rate period is the only tool you have for holding on to a figure like that. The rest is arithmetic — and I will show it to you here on real numbers, not on a model.
What things looked like back then
In 2020 and 2021, mortgages were being arranged at around two percent. According to the Czech National Bank, the average rate on new mortgages in January 2021 was 1.99%; a year earlier it had been 2.38%. With a rate like that, banks routinely offered a fixed-rate period of three or five years — a longer one was either not offered unless you asked for it, or was noticeably more expensive.
At the time, I rang the clients this applied to. Not one of them had asked for that phone call. Most reacted in an understandable way: why pay a little more for certainty I am not going to need anyway?
One specific contract
This is a real loan from my files. I am not giving the name, the bank or the location; the figures are exactly as they appear in the contract.
Autumn 2020
Loan CZK 4,030,000 · interest rate 1.99% per annum · APRC 2.02% · annuity instalment CZK 16,932 · term 313 months.
Rate fixed until October 2030 — in other words, for ten years. The usual offer at the time was five.
Had this client taken the standard five-year fixed rate, it would have ended in October 2025. Up to that point they would have repaid exactly the same, because the rate and the instalment were identical in the first years. The difference only starts there.
In October 2025, CZK 3,496,205 would have been left on the loan, and the client would have been given a new rate. According to the CNB, the average rate on new mortgages in July 2026 was 4.76%. Let us take that as a realistic figure.
What would have happened with a five-year fixed rate
Instalment: CZK 16,932 → CZK 21,919, i.e. CZK 4,988 more a month.
Interest over the five years after the rate reset: CZK 770,981, instead of the CZK 314,120 paid by someone whose fixed rate is still running.
Difference in interest alone: CZK 456,861.
Why I count the interest, not the difference in instalments
This is where articles like this one commonly exaggerate, usually without meaning to.
The difference in instalments over five years comes to CZK 299,268. That is a smaller number than the 457 thousand, so it might look as though I simply picked the bigger one. It is the other way round: the difference in instalments is the wrong number for this purpose, even though it is lower.
An instalment is made up of interest and principal. Principal is not a saving — it is money the borrower borrowed and will pay back either way. On top of that, a lower rate pays the principal down faster, so after five years they owe less. The only thing you can save on is what goes to the bank for lending you the money. In other words, the interest.
Where the 457 thousand actually goes
CZK 299,268 is cash that stays in the client’s account month after month, to use however they like.
CZK 157,593 is principal paid off faster — value in the property, not money in the wallet. It belongs to the client, but it cannot be spent or invested.
I am spelling this out because “I saved you 457 thousand” sounds simpler than the reality. The reality is still good — it is just not that one-dimensional.
What this does not mean
It does not mean that a longer fixed-rate period is always better. When rates are high, it is exactly the other way round — a long fixed-rate period locks you into an expensive number, and repaying early in the middle of a fixed-rate period can cost you something.
It means only one thing, and in my view it is the most useful sentence about mortgages there is: the length of the fixed-rate period is a decision about how often you will be exposed to the market. Not a guess about where the market will go. Someone with a three-year fixed rate places a bet ten times in thirty years. Someone with a ten-year one, three times.
I have explained in a separate article why I am not counting on a return to two-percent rates, based on what the Governor of the Czech National Bank is saying.
When to deal with it
Most people deal with it when the letter from the bank with the new rate arrives. That is too late — by then you are no longer choosing, just taking whatever is on offer.
I work with clients in a window of 36 to 12 months before the fixed-rate period ends. During that time I keep an eye on the market and get the documents ready, so there is something to choose from. The final year is very tight. The specific terms always depend on the bank’s assessment and offers are only valid for a limited time — but you can prepare well in advance.
Frequently asked questions
Is a longer fixed-rate period always better?
No. A long fixed-rate period is good when you are locking in a low number and bad when you are locking in a high one — then it keeps you on an expensive rate. What decides it is where rates stand relative to their history, not a guess about the future.
How much extra does a longer fixed-rate period cost?
As a rule, it does cost something — a longer fixed-rate period tends to be more expensive than a shorter one. In August 2026, rates up to 80% LTV differed roughly as follows: three years 5.17%, five years 5.41%, ten years 5.93%. That difference is the price of certainty, and it needs to be weighed against what you are risking.
Why is the saving calculated from the interest and not from the instalments?
An instalment also includes principal — money you borrowed and will pay back either way. The only thing you can save on is the price of borrowing, which is the interest. Anyone who calculates the saving from instalments is lumping their own money together with costs.
When should I start dealing with the end of my fixed-rate period?
I raise it with clients 36 to 12 months ahead. The final year is already tight — by then there is little room to compare and a lot of improvising.
Is your fixed-rate period ending within the next three years?
Write to me and I will get back to you. All I need to know is which bank your mortgage is with, roughly how much is left to repay and when your fixed-rate period ends. We will go through the options, and I will tell you straight if it is not worth changing anything.
Leave your details +420 725 032 139Representative example under Section 91 of the Consumer Credit Act (Act No. 257/2016 Coll.)
The figures correspond to the contract described above. A purpose-bound consumer credit for housing secured by real estate, arranged to repay an existing mortgage loan with another bank. Intermediary: Jan Roztočil, Czech business identification number (IČO) 76037061, tied agent representing a single company, Broker Trust, a.s.
Total amount of credit CZK 4,030,000 · fixed borrowing rate 1.99% per annum, valid until 14 October 2030 · APRC 2.02% · annuity instalment CZK 16,932 · term 313 months · total amount payable by the consumer CZK 5,190,941.70.
The loan is secured by a charge over the property. The APRC and the total amount payable are for information only and are based on the assumptions stated in the representative example and the repayment schedule as at the date the contract was concluded: immediate and full drawdown, an unchanged rate for the entire repayment period, and proper and timely repayment. The rate was agreed as a discounted rate on condition that funds are regularly credited to an account with the same bank; if this condition is not met, the rate — and correspondingly the instalment — may increase. Figures taken from an anonymised contract. This is a past contract from 2020, not an offer — today’s terms are different and always depend on an individual assessment of the client.
Sources of the figures: the loan parameters are taken from an anonymised loan agreement. Average rates on new mortgage loans to households according to the Czech National Bank (January 2020 2.38%, January 2021 1.99%, July 2026 4.76%). Rates by length of fixed-rate period as of August 2026 are based on banks’ offers up to 80% LTV. The remaining balance, the instalment after the rate reset and the interest are calculated on an annuity basis, assuming an unchanged rate within the period concerned and no extra repayments; checked against the instalment stated in the contract. The average of offered rates tends to be higher than the average of rates actually agreed — had it been used, the difference in interest would have come out even higher.
Marketing communication. This text is for information only; it is not an offer or a personal recommendation and it contains no forecast of future developments in interest rates. The case described is one specific contract and says nothing about the results that can be achieved in a different situation. Jan Roztočil, Czech business identification number (IČO) 76037061 · tied agent representing a single company, Broker Trust, a.s. · supervised by the Czech National Bank.