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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, 46 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

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

Worked out for 46 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years5,1 Mio. Kč

Rent: after 10 years4,8 Mio. Kč

The result

Buying comes out ahead from year 6. After 10 years you'd have 333.200 Kč more than if you rented.

A month in the first year

Buying
35.903 Kča month
Renting
17.649 Kča month
Buying
Mortgage: 33.150 Kč · Owner's costs: 1.390 Kč · Upkeep: 3.238 Kč · Tax relief: −1.875 Kč
Cash on day one
1.571.391 Kč
Mortgage: 6.217.565 Kč

What you'd have after 10 years

If you buy
5.132.890 Kč
If you rent
4.799.690 Kč
Break-even
Year 6
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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
18.005.115 Kč6.124.831 Kč430.836 Kč211.788 Kč1.642.502 Kč1.860.063 Kč
28.245.268 Kč6.027.410 Kč432.504 Kč218.136 Kč1.975.727 Kč2.155.906 Kč
38.492.626 Kč5.925.068 Kč434.232 Kč224.688 Kč2.321.378 Kč2.459.073 Kč
48.747.405 Kč5.817.554 Kč435.996 Kč231.432 Kč2.679.950 Kč2.769.712 Kč
59.009.827 Kč5.704.606 Kč437.820 Kč238.368 Kč3.051.952 Kč3.087.996 Kč
69.280.122 Kč5.585.951 Kč439.692 Kč245.520 Kč3.437.918 Kč3.414.076 Kč
79.558.526 Kč5.461.300 Kč441.624 Kč252.888 Kč3.838.404 Kč3.748.118 Kč
89.845.281 Kč5.330.349 Kč443.616 Kč260.472 Kč4.253.988 Kč4.090.293 Kč
910.140.640 Kč5.192.781 Kč445.656 Kč268.284 Kč4.685.275 Kč4.440.759 Kč
1010.444.859 Kč5.048.262 Kč447.768 Kč276.336 Kč5.132.890 Kč4.799.690 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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