Mortgage Rates at the Bottom, a Wave of Refixations Ahead, and Investments at New Records. What Did 2025 Bring and What to Expect in 2026?
Those who are prepared are not surprised. In the world of finance, this applies more than anywhere else. Let’s take a quick overview of what 2025 brought in mortgages, investments, and insurance — and what we can realistically expect in 2026.
Mortgage rates will not fall further
Mortgage interest rates have reached their lowest levels in the last three years. From nearly 6% in 2022, average rates dropped below 4.5% by the end of 2025. Further declines in the coming months are unlikely; on the contrary, an increase is expected. Central banks are keeping rates relatively high due to inflation risks, and the cost of money for loan financing is rising because of global uncertainty. As a result, banks will gradually start increasing mortgage rates.
Property prices continued to rise significantly in 2025, by more than 10% year-on-year. We expect prices — especially in large cities — to keep growing. If you are considering buying your own home, there is little reason to wait. We can quickly check what mortgage amount you are likely to qualify for.
An extreme wave of mortgage refixations from 2019 and 2021
In 2026, the market will face a massive wave of mortgage refixations from 2021, when a record 70,000 mortgages with five-year fixed rates were issued. Mortgages with seven-year fixed rates arranged after 2018 will also be refixed. These loans currently have exceptionally low rates, and for an average mortgage, clients can expect monthly repayments to increase by CZK 2,000–3,000.
Banks are legally required to send a new rate offer three months before the end of the fixation period. An active approach clearly pays off — have the initial offer reviewed by your financial advisor.
You are not required to accept the first proposal. You can negotiate with your bank or present a competing offer from another institution. A skilled advisor can very likely secure better terms for you. Do not hesitate to contact us — we will help you resolve everything in time.
More complicated purchases of investment properties
According to recommendations by the Czech National Bank, banks are expected to tighten conditions for loans financing investment properties from April 2026. If an applicant is buying a property for rental purposes or purchasing a third or additional residential property, banks should lend a maximum of 70% of the property’s value, and the applicant’s total debt must not exceed seven times their annual income.
In today’s environment, investment property purchases require careful calculations. We will go through all the key numbers with you to ensure your investment plan truly makes financial sense.
Stocks: growth after a wild ride
Stock markets once again showed that patient investors can achieve returns many times higher than those offered by savings accounts. Stocks fell briefly after President Donald Trump took office, mainly due to the introduction of tariffs and fears of trade wars. However, U.S. equities, represented by the S&P 500 index, rebounded and gained more than 16% since the start of the year. Expectations surrounding artificial intelligence have been a major driver, with some technology stocks rising by tens or even hundreds of percent.
The AI boom will likely continue in 2026, but caution is warranted — betting everything on endless growth in technology is risky. Over the long term, broadly diversified portfolios across sectors and asset classes have proven most resilient, including not only equities but also bonds, real estate, or gold, which also reached record prices in 2025.
We can help you select a solution tailored to your goals, ensuring your investments are sensibly diversified with established investment companies. Do not let your money sit idle in savings accounts, where it is unlikely to beat inflation in 2026 — put it to work for you.
A weakening dollar disappointed investors
Czech investors holding U.S. dollar investments without currency hedging were certainly disappointed by the weakening of the dollar against the Czech koruna. The exchange rate fell from nearly CZK 25 per dollar in January to close to CZK 20. Despite rising U.S. stock markets, some investors temporarily recorded losses exceeding 10%. This situation highlighted the importance of currency hedging for certain types of investments. We can help you decide when currency hedging makes sense.
DIP has completed its second successful year
The Long-Term Investment Product (DIP) has become firmly established in the Czech market. Nearly 200,000 people have opened one within two years. DIP allows individuals to tailor their retirement investments very flexibly while benefiting from attractive tax advantages, including annual tax deductions.
Each year, you can deduct up to CZK 48,000 of contributions to a DIP from your tax base, saving up to CZK 7,200 in taxes. More than 30 providers now offer DIP products, allowing much broader investment options than traditional supplementary pension savings. Investments can include ETFs, mutual funds, equities, or bonds.
Employers can contribute up to CZK 50,000 per year to a DIP without these contributions being subject to mandatory payroll charges. DIP is especially powerful when combined with supplementary pension savings, which benefit from state contributions — the government can add up to CZK 4,080 per year when you invest CZK 1,700 per month.
Do you still have money in an old pension product?
Nearly two million people still hold retirement savings in so-called transformed funds, where their money is barely growing. This is a major missed opportunity. While these funds cannot deliver negative returns, they are extremely conservative and fail to beat inflation over the long term. Over the past ten years, they achieved an average annual return of just 1.13%, while inflation averaged around 4%. In real terms, savings are losing value.
For younger generations with an investment horizon of 10 years or more, much more attractive options are available today — simply transferring funds from transformed funds into modern supplementary pension savings. This change alone can result in hundreds of thousands or even millions of Czech crowns more in retirement savings due to a more growth-oriented strategy, without increasing monthly contributions.
Moreover, from January 1, 2026, new legislation will require employers to contribute to retirement savings products for employees classified in risk category 3 based on job risk. Want to know more? Ask us.
Rising prices increase the risk of underinsurance
Property prices have risen at double-digit rates, and inflation has also driven up construction costs. As a result, the risk of underinsurance has increased significantly — properties insured for less than their actual replacement value. In the Czech Republic, this affects up to 70% of properties.
In the event of a claim, insurers may reduce payouts proportionally, forcing owners to cover part of the repair costs themselves. We strongly recommend reviewing insurance policies every two years to ensure you can truly rely on them.
Due to overall price increases, it also makes sense to review insured sums in life insurance policies. If you arranged your policy five or ten years ago, today’s costs are substantially higher, and potential payouts may no longer be sufficient. We are happy to review your insurance policies quickly and thoroughly so they truly support you in difficult times.
Insurance for a “bad day”
Some stories — such as a dog accidentally shutting down part of Prague’s metro system for several hours — may sound amusing, but they clearly show how a moment of inattention can cause damage worth millions. You can effectively protect yourself against such consequences with personal liability insurance.
It is one of the most affordable insurance products and can protect you from massive financial losses if you, your children, or even your pets accidentally cause damage. One final recommendation: always choose policies with sufficiently high coverage limits. The price difference is minimal, but the difference in coverage can amount to millions. This also applies to motor third-party liability and comprehensive car insurance.
We wish you good health in the new year, fewer mishaps, and no need to use any of your insurance policies. But we are here for you if you want to be sure everything is set up correctly — so you can have peace of mind.
