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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, 84 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

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

Worked out for 84 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years5,9 Mio. Kč

Rent: after 10 years5,3 Mio. Kč

The result

Buying comes out ahead from year 5. After 10 years you'd have 563.878 Kč more than if you rented.

A month in the first year

Buying
42.617 Kča month
Renting
22.510 Kča month
Buying
Mortgage: 38.345 Kč · Owner's costs: 2.401 Kč · Upkeep: 3.746 Kč · Tax relief: −1.875 Kč
Cash on day one
1.815.000 Kč
Mortgage: 7.192.000 Kč

What you'd have after 10 years

If you buy
5.912.685 Kč
If you rent
5.348.807 Kč
Break-even
Year 5
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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
19.259.700 Kč7.084.738 Kč511.404 Kč270.120 Kč1.897.689 Kč2.134.204 Kč
29.537.491 Kč6.972.057 Kč513.612 Kč278.220 Kč2.280.857 Kč2.460.667 Kč
39.823.616 Kč6.853.680 Kč515.892 Kč286.572 Kč2.678.353 Kč2.794.513 Kč
410.118.324 Kč6.729.321 Kč518.244 Kč295.164 Kč3.090.738 Kč3.135.879 Kč
510.421.874 Kč6.598.678 Kč520.668 Kč304.020 Kč3.518.607 Kč3.484.887 Kč
610.734.530 Kč6.461.434 Kč523.152 Kč313.140 Kč3.962.574 Kč3.841.651 Kč
711.056.566 Kč6.317.254 Kč525.720 Kč322.536 Kč4.423.282 Kč4.206.302 Kč
811.388.263 Kč6.165.788 Kč528.360 Kč332.208 Kč4.901.400 Kč4.578.965 Kč
911.729.911 Kč6.006.666 Kč531.084 Kč342.180 Kč5.397.627 Kč4.959.759 Kč
1012.081.808 Kč5.839.504 Kč533.880 Kč352.440 Kč5.912.685 Kč5.348.807 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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