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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, 106 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

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

Worked out for 106 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years7 Mio. Kč

Rent: after 10 years7,2 Mio. Kč

The result

Renting comes out ahead over 10 years: you'd have 158.638 Kč more than if you bought.

A month in the first year

Buying
51.305 Kča month
Renting
22.260 Kča month
Buying
Mortgage: 45.727 Kč · Owner's costs: 2.986 Kč · Upkeep: 4.467 Kč · Tax relief: −1.875 Kč
Cash on day one
2.161.128 Kč
Mortgage: 8.576.512 Kč

What you'd have after 10 years

If you buy
7.011.811 Kč
If you rent
7.170.449 Kč
Break-even
Not within 10 years
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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
111.042.259 Kč8.448.598 Kč615.660 Kč267.120 Kč2.262.393 Kč2.602.867 Kč
211.373.527 Kč8.314.220 Kč618.348 Kč275.136 Kč2.718.101 Kč3.056.851 Kč
311.714.733 Kč8.173.051 Kč621.108 Kč283.392 Kč3.190.240 Kč3.523.399 Kč
412.066.175 Kč8.024.748 Kč623.952 Kč291.888 Kč3.679.442 Kč4.002.853 Kč
512.428.160 Kč7.868.951 Kč626.892 Kč300.648 Kč4.186.364 Kč4.495.559 Kč
612.801.005 Kč7.705.282 Kč629.904 Kč309.660 Kč4.711.693 Kč5.001.865 Kč
713.185.035 Kč7.533.340 Kč633.024 Kč318.960 Kč5.256.144 Kč5.522.130 Kč
813.580.586 Kč7.352.710 Kč636.228 Kč328.524 Kč5.820.458 Kč6.056.730 Kč
913.988.004 Kč7.162.952 Kč639.528 Kč338.376 Kč6.405.412 Kč6.606.043 Kč
1014.407.644 Kč6.963.604 Kč642.924 Kč348.528 Kč7.011.811 Kč7.170.449 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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