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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+1 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

840.000 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 years2,9 Mio. Kč

Rent: after 10 years2,5 Mio. Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 403.275 Kč more than if you rented.

A month in the first year

Buying
19.685 Kča month
Renting
11.375 Kča month
Buying
Mortgage: 17.914 Kč · Owner's costs: 1.896 Kč · Upkeep: 1.750 Kč · Tax relief: −1.875 Kč
Cash on day one
857.000 Kč
Mortgage: 3.360.000 Kč

What you'd have after 10 years

If you buy
2.902.609 Kč
If you rent
2.499.334 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
14.326.000 Kč3.309.890 Kč236.220 Kč136.500 Kč898.645 Kč1.005.540 Kč
24.455.780 Kč3.257.250 Kč237.540 Kč140.592 Kč1.090.211 Kč1.157.430 Kč
34.589.453 Kč3.201.949 Kč238.884 Kč144.816 Kč1.288.974 Kč1.312.703 Kč
44.727.137 Kč3.143.853 Kč240.276 Kč149.160 Kč1.495.222 Kč1.471.427 Kč
54.868.951 Kč3.082.822 Kč241.716 Kč153.636 Kč1.709.247 Kč1.633.662 Kč
65.015.020 Kč3.018.707 Kč243.192 Kč158.244 Kč1.931.362 Kč1.799.459 Kč
75.165.470 Kč2.951.351 Kč245.074 Kč162.984 Kč2.161.531 Kč1.968.880 Kč
85.320.434 Kč2.880.592 Kč247.145 Kč167.880 Kč2.399.924 Kč2.141.960 Kč
95.480.047 Kč2.806.255 Kč249.289 Kč172.920 Kč2.646.846 Kč2.318.755 Kč
105.644.449 Kč2.728.164 Kč251.520 Kč178.104 Kč2.902.609 Kč2.499.334 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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