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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, 72 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

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

Worked out for 72 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,3 Mio. Kč

Rent: after 10 years2,4 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 899.435 Kč more than if you rented.

A month in the first year

Buying
22.391 Kča month
Renting
15.600 Kča month
Buying
Mortgage: 20.210 Kč · Owner's costs: 2.082 Kč · Upkeep: 1.974 Kč · Tax relief: −1.875 Kč
Cash on day one
964.645 Kč
Mortgage: 3.790.579 Kč

What you'd have after 10 years

If you buy
3.283.888 Kč
If you rent
2.384.453 Kč
Break-even
Year 3
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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
14.880.371 Kč3.734.046 Kč268.692 Kč187.200 Kč1.013.748 Kč1.100.450 Kč
25.026.782 Kč3.674.656 Kč270.144 Kč192.816 Kč1.229.891 Kč1.237.794 Kč
35.177.585 Kč3.612.262 Kč271.656 Kč198.600 Kč1.454.243 Kč1.376.638 Kč
45.332.913 Kč3.546.716 Kč273.204 Kč204.564 Kč1.687.133 Kč1.516.908 Kč
55.492.900 Kč3.477.858 Kč274.800 Kč210.696 Kč1.928.898 Kč1.658.548 Kč
65.657.687 Kč3.405.521 Kč276.456 Kč217.020 Kč2.179.896 Kč1.801.489 Kč
75.827.418 Kč3.329.529 Kč278.136 Kč223.524 Kč2.440.499 Kč1.945.638 Kč
86.002.240 Kč3.249.698 Kč279.876 Kč230.232 Kč2.711.093 Kč2.090.909 Kč
96.182.308 Kč3.165.832 Kč281.676 Kč237.144 Kč2.992.084 Kč2.237.212 Kč
106.367.777 Kč3.077.728 Kč283.524 Kč244.248 Kč3.283.888 Kč2.384.453 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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