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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

539.980 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 years1,9 Mio. Kč

Rent: after 10 years969.233 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 969.983 Kč more than if you rented.

A month in the first year

Buying
12.839 Kča month
Renting
11.900 Kča month
Buying
Mortgage: 11.516 Kč · Owner's costs: 1.523 Kč · Upkeep: 1.125 Kč · Tax relief: −1.325 Kč
Cash on day one
556.980 Kč
Mortgage: 2.159.920 Kč

What you'd have after 10 years

If you buy
1.939.216 Kč
If you rent
969.233 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
12.780.897 Kč2.127.705 Kč154.071 Kč142.800 Kč583.398 Kč604.658 Kč
22.864.324 Kč2.093.862 Kč155.276 Kč147.084 Kč712.375 Kč651.135 Kč
32.950.254 Kč2.058.310 Kč156.504 Kč151.500 Kč846.089 Kč696.252 Kč
43.038.761 Kč2.020.961 Kč157.794 Kč156.036 Kč984.715 Kč739.886 Kč
53.129.924 Kč1.981.724 Kč159.121 Kč160.728 Kč1.128.443 Kč781.856 Kč
63.223.822 Kč1.940.502 Kč160.486 Kč165.540 Kč1.277.467 Kč822.004 Kč
73.320.536 Kč1.897.198 Kč161.903 Kč170.508 Kč1.431.982 Kč860.145 Kč
83.420.153 Kč1.851.708 Kč163.383 Kč175.620 Kč1.592.197 Kč896.110 Kč
93.522.757 Kč1.803.919 Kč164.892 Kč180.900 Kč1.760.619 Kč931.955 Kč
103.628.440 Kč1.753.712 Kč166.466 Kč186.324 Kč1.939.216 Kč969.233 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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