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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+kk zum Kauf, 51 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

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

Worked out for 51 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years2,3 Mio. Kč

Rent: after 10 years1,4 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 948.571 Kč more than if you rented.

A month in the first year

Buying
15.354 Kča month
Renting
12.750 Kča month
Buying
Mortgage: 14.075 Kč · Owner's costs: 1.523 Kč · Upkeep: 1.375 Kč · Tax relief: −1.619 Kč
Cash on day one
677.000 Kč
Mortgage: 2.640.000 Kč

What you'd have after 10 years

If you buy
2.339.782 Kč
If you rent
1.391.211 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
13.399.000 Kč2.600.633 Kč184.246 Kč153.000 Kč711.604 Kč751.455 Kč
23.500.970 Kč2.559.276 Kč185.589 Kč157.596 Kč867.684 Kč825.569 Kč
33.605.999 Kč2.515.827 Kč186.982 Kč162.312 Kč1.029.446 Kč899.247 Kč
43.714.179 Kč2.470.186 Kč188.415 Kč167.184 Kč1.197.099 Kč972.350 Kč
53.825.604 Kč2.422.236 Kč189.913 Kč172.200 Kč1.370.867 Kč1.044.765 Kč
63.940.373 Kč2.371.865 Kč191.441 Kč177.372 Kč1.550.980 Kč1.116.329 Kč
74.058.584 Kč2.318.948 Kč193.035 Kč182.688 Kč1.737.673 Kč1.186.919 Kč
84.180.341 Kč2.263.355 Kč194.684 Kč188.172 Kč1.931.200 Kč1.256.373 Kč
94.305.752 Kč2.204.955 Kč196.389 Kč193.812 Kč2.131.812 Kč1.324.532 Kč
104.434.924 Kč2.143.601 Kč198.152 Kč199.632 Kč2.339.782 Kč1.391.211 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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