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Should you rent or buy?

Put the same home side by side: bought with a mortgage, or rented while the money you'd have put down is invested. See which leaves you better off, and from which year.

From Wohnung 3+kk zum Kauf, 65 m²: its asking price, floor area and Bytky's rent estimate. Open the listing

Start from an area

Pick a town, district or neighbourhood and a layout. The price and the rent become the area's medians today.

The home

Without the charges for services (heating, water, the lift).

If you buy

1.358.000 Kč of your own money. Under 36, banks may lend up to 90 %.

Worked out for 65 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4,5 Mio. Kč

Rent: after 10 years4 Mio. Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 540.329 Kč more than if you rented.

A month in the first year

Buying
31.811 Kča month
Renting
17.411 Kča month
Buying
Mortgage: 28.961 Kč · Owner's costs: 1.896 Kč · Upkeep: 2.829 Kč · Tax relief: −1.875 Kč
Cash on day one
1.375.000 Kč
Mortgage: 5.432.000 Kč

What you'd have after 10 years

If you buy
4.536.275 Kč
If you rent
3.995.946 Kč
Break-even
Year 4
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What you'd have at each year's end

Year by year

Year by year
YearHome valueStill owedPaid to ownPaid in rentBuying: you'd haveRenting: you'd have
16.993.700 Kč5.350.991 Kč381.732 Kč208.932 Kč1.439.123 Kč1.612.580 Kč
27.203.511 Kč5.265.887 Kč383.436 Kč215.196 Kč1.734.598 Kč1.855.400 Kč
37.419.616 Kč5.176.484 Kč385.176 Kč221.652 Kč2.041.144 Kč2.103.525 Kč
47.642.205 Kč5.082.563 Kč387.000 Kč228.300 Kč2.359.200 Kč2.357.064 Kč
57.871.471 Kč4.983.896 Kč388.848 Kč235.152 Kč2.689.225 Kč2.616.067 Kč
68.107.615 Kč4.880.242 Kč390.768 Kč242.208 Kč3.031.696 Kč2.880.629 Kč
78.350.844 Kč4.771.349 Kč392.736 Kč249.480 Kč3.387.110 Kč3.150.814 Kč
88.601.369 Kč4.656.954 Kč394.776 Kč256.956 Kč3.755.980 Kč3.426.725 Kč
98.859.410 Kč4.536.780 Kč396.852 Kč264.672 Kč4.138.848 Kč3.708.400 Kč
109.125.192 Kč4.410.532 Kč399.012 Kč272.604 Kč4.536.275 Kč3.995.946 Kč

Thinking of letting it instead? Work out its cash flow

Reader poll

Do you own the home you live in?

Anonymous, one answer per browser. We use the answers to learn who reads Bytky.

How the comparison works

The same home, bought or rented, month by month for the years you stay. Money is never left idle: whoever pays less in a month invests the difference, and both earn the same return.

What it counts

  • Buying: the down payment and the purchase costs on the first day, then each month the mortgage, the owner's costs and upkeep. The home's value grows each year.
  • Renting: the rent, rising once a year. The charges for services are left out, because owners pay them too.
  • The renter invests what the buyer put down on day one. After that, each month, whichever side pays less invests the difference.
  • At each year's end the buyer sells: the home's value, less the mortgage still owed and the selling costs, plus their investments. The renter has their investments.
  • Mortgage interest on your own home lowers your income tax base, up to a yearly cap; the saving comes back once a year with the tax return.

What it leaves out

  • Inflation: everything is in today's crowns as they'll be paid, not adjusted to today's value.
  • Rate changes: the rate stays the same for the whole term, though real mortgages are re-fixed every few years.
  • Moving and furnishing, which both sides pay.
  • Tax on investment gains: shares and funds held for over three years are free of income tax in Czechia.
  • Risk: a home's value and investments can fall as well as rise, and neither is certain.

Every starting figure and its source

Verified figures come from the law or the ČNB, checked on the date shown. Assumptions are typical values: change them to yours.

Questions

Questions about renting or buying

Is it better to rent or buy in Czechia?

It depends on three things: how many years of rent the home costs, how long you'll stay, and what your money would earn elsewhere. Where homes cost many years of rent, renting and investing the difference can leave you ahead for a long time; where rents are high against prices, buying catches up sooner. Put in your own figures, or start from an area to use its live medians.

How long do I need to stay for buying to pay off?

The calculator shows the break-even year: the first year's end from which selling would leave you better off than having rented. Buying costs about 17.000 Kč in fees up front and selling about 3 % of the price at the end, so short stays favour renting.

What does an owner pay that a tenant doesn't?

The building's repair fund, its administration, insurance of the home, the yearly property tax and repairs inside the home. Tenants and owners both pay the charges for services such as heating and water, so the calculator leaves those out.

Can I deduct mortgage interest from my taxes?

Yes, for your own home. The interest lowers your income tax base by up to 150.000 Kč a year for loans from 2021, or 300.000 Kč for older ones, which saves 15 % of the interest you deduct. The calculator assumes you pay at least that much income tax in Czechia; switch the relief off if you don't.

How much do I need to put down?

At least 20 % of the price. The ČNB caps a mortgage at 80 % of the home's value, or 90 % for applicants under 36. On top come the purchase costs: the cadastre fee and a lawyer for the contract and escrow.

Is this financial advice?

No. It's a model with the assumptions shown on this page. A mortgage adviser can tell you what a bank would actually lend you and at what rate.

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