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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, 54 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

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

Worked out for 54 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,5 Mio. Kč

Rent: after 10 years2,4 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.012.135 Kč more than if you rented.

A month in the first year

Buying
23.133 Kča month
Renting
16.326 Kča month
Buying
Mortgage: 21.322 Kč · Owner's costs: 1.603 Kč · Upkeep: 2.083 Kč · Tax relief: −1.875 Kč
Cash on day one
1.016.800 Kč
Mortgage: 3.999.200 Kč

What you'd have after 10 years

If you buy
3.455.988 Kč
If you rent
2.443.853 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
15.148.970 Kč3.939.558 Kč277.596 Kč195.912 Kč1.068.761 Kč1.154.871 Kč
25.303.439 Kč3.876.903 Kč278.916 Kč201.792 Kč1.296.002 Kč1.294.201 Kč
35.462.542 Kč3.811.081 Kč280.296 Kč207.840 Kč1.531.883 Kč1.434.740 Kč
45.626.419 Kč3.741.934 Kč281.700 Kč214.080 Kč1.776.752 Kč1.576.381 Kč
55.795.211 Kč3.669.291 Kč283.140 Kč220.500 Kč2.030.972 Kč1.719.031 Kč
65.969.067 Kč3.592.978 Kč284.652 Kč227.112 Kč2.294.911 Kč1.862.619 Kč
76.148.139 Kč3.512.808 Kč286.176 Kč233.928 Kč2.568.968 Kč2.007.003 Kč
86.332.584 Kč3.428.587 Kč287.772 Kč240.948 Kč2.853.546 Kč2.152.092 Kč
96.522.561 Kč3.340.110 Kč289.404 Kč248.172 Kč3.149.071 Kč2.297.757 Kč
106.718.238 Kč3.247.162 Kč291.084 Kč255.624 Kč3.455.988 Kč2.443.853 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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