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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 2+1 zum Kauf, 48 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

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

Worked out for 48 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years2,6 Mio. Kč

Rent: after 10 years1,4 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.155.261 Kč more than if you rented.

A month in the first year

Buying
16.533 Kča month
Renting
14.400 Kča month
Buying
Mortgage: 15.355 Kč · Owner's costs: 1.444 Kč · Upkeep: 1.500 Kč · Tax relief: −1.766 Kč
Cash on day one
737.000 Kč
Mortgage: 2.880.000 Kč

What you'd have after 10 years

If you buy
2.562.221 Kč
If you rent
1.406.960 Kč
Break-even
Year 2
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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
13.708.000 Kč2.837.048 Kč198.392 Kč172.800 Kč777.009 Kč810.221 Kč
23.819.240 Kč2.791.925 Kč199.773 Kč177.984 Kč948.043 Kč882.511 Kč
33.933.817 Kč2.744.522 Kč201.195 Kč183.324 Kč1.125.326 Kč953.711 Kč
44.051.832 Kč2.694.724 Kč202.683 Kč188.820 Kč1.309.094 Kč1.023.674 Kč
54.173.387 Kč2.642.410 Kč204.224 Kč194.484 Kč1.499.589 Kč1.092.230 Kč
64.298.588 Kč2.587.450 Kč205.809 Kč200.328 Kč1.697.068 Kč1.159.175 Kč
74.427.546 Kč2.529.714 Kč207.461 Kč206.328 Kč1.901.793 Kč1.224.344 Kč
84.560.372 Kč2.469.062 Kč209.159 Kč212.520 Kč2.114.033 Kč1.287.509 Kč
94.697.183 Kč2.405.344 Kč210.927 Kč218.892 Kč2.334.077 Kč1.348.467 Kč
104.838.099 Kč2.338.407 Kč212.742 Kč225.468 Kč2.562.221 Kč1.406.960 Kč

Thinking of letting it instead? Work out its cash flow

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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