The CNB and monetary policy in 2026
The Czech National Bank (CNB) began its rate-cutting cycle in mid-2025. The key two-week repo rate has been cut in several steps from 5.25% to the current 3.5% (as of January 2026). The bank board has signalled that it stands ready to continue cautious cuts if inflation develops favourably.
How the repo rate affects mortgages
The repo rate is the rate at which commercial banks borrow from the central bank. When the CNB cuts the rate, banks can obtain cheaper funding and subsequently offer lower mortgage rates. This pass-through isn't immediate — it typically takes 2–4 weeks for a repo rate change to filter through to mortgage offers.
It's important to understand that the repo rate isn't the only factor. Banks also consider interbank rates (PRIBOR), their own funding costs, regulatory requirements and the competitive environment.
Impact on the property market
Lower interest rates have a multi-faceted impact on the property market:
**Greater mortgage accessibility** — on a CZK 4 million mortgage over 30 years, a rate drop from 5% to 3.5% means approximately CZK 3,500 lower monthly payments.
**Demand growth** — more approved mortgages mean more buyers in the market, creating upward price pressure.
**Investment attractiveness** — with lower rates on savings accounts and bonds, property becomes a more attractive investment thanks to stable rental yields.
**Overheating risk** — historically, every significant rate cut has led to property price increases. The CNB therefore closely monitors developments in the property market.
Analyst forecasts
Most analysts expect the CNB to lower the repo rate during 2026 to around 3–3.25%. This could push average mortgage rates into the 3.5–3.8% band. More aggressive cuts are unlikely — inflation remains slightly above target.
What it means for buyers and sellers
**For buyers:** Current conditions are favourable, and waiting for further rate cuts may be counterproductive if property prices rise in the meantime. We recommend acting now and refinancing if rates fall further.
**For sellers:** Increased buyer interest creates favourable selling conditions. Properties are selling faster and at higher prices than during the high-rate period of 2023–2024.
Want to know how rate changes will affect your specific situation? Contact Klik Home — we'll advise you on the optimal timing for buying or selling.