Mortgages for the self-employed: how banks calculate business income

4 October 2026

For an employee, the bank sees a salary. For the self-employed, it works from what you declared to the tax office. That is often where it is decided how much you can borrow.

What the bank works from

The basis is your tax return, usually for the last one or two years, and confirmation that you owe no tax or insurance. From it the bank calculates your monthly income and compares it with the payment and your expenses.

A simple rule applies: lower declared profit means a smaller mortgage. A low profit looks good in a tax return but is missing in a loan application.

Actual expenses, flat-rate expenses, flat-rate tax

• Actual expenses: the bank works from the tax base, your income minus your actual costs.
• Flat-rate expenses: Czech law lets you deduct 30 to 80 % of income depending on the type of business (capped at CZK 600,000 to 1.6 million). Many banks use their own calculation from turnover, because the flat rate may not reflect real costs. Each bank uses a different coefficient.
• Flat-rate tax (paušální daň): no tax return is filed, so banks usually work from the turnover on your business account and count only part of it as income.

That is why the same person can get quite different amounts from two banks.

What to watch out for

• How long you have been in business. Banks usually want at least one full tax year, some two.
• Whether your income goes to a business account rather than cash. Statements are the main proof under the flat-rate tax.
• Combining employment and self-employment. Banks can add them up, but assess each part differently.
• This year's tax return. If you plan a mortgage next year, what goes into it is being decided now.

The documents banks ask for are in the documents checklist.

This article is general and educational, not a loan offer or a recommendation of any product. Terms differ by bank. Figures as of October 2026.