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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, 44 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

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

Worked out for 44 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years5 Mio. Kč

Rent: after 10 years4,8 Mio. Kč

The result

Buying comes out ahead from year 7. After 10 years you'd have 267.431 Kč more than if you rented.

A month in the first year

Buying
35.112 Kča month
Renting
16.882 Kča month
Buying
Mortgage: 32.477 Kč · Owner's costs: 1.337 Kč · Upkeep: 3.173 Kč · Tax relief: −1.875 Kč
Cash on day one
1.539.845 Kč
Mortgage: 6.091.379 Kč

What you'd have after 10 years

If you buy
5.028.932 Kč
If you rent
4.761.501 Kč
Break-even
Year 7
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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
17.842.651 Kč6.000.530 Kč421.344 Kč202.584 Kč1.609.236 Kč1.826.986 Kč
28.077.930 Kč5.905.089 Kč422.964 Kč208.656 Kč1.935.760 Kč2.121.450 Kč
38.320.268 Kč5.804.827 Kč424.644 Kč214.920 Kč2.274.448 Kč2.423.407 Kč
48.569.876 Kč5.699.497 Kč426.360 Kč221.364 Kč2.625.785 Kč2.733.023 Kč
58.826.972 Kč5.588.846 Kč428.136 Kč228.012 Kč2.990.267 Kč3.050.468 Kč
69.091.782 Kč5.472.602 Kč429.960 Kč234.852 Kč3.368.421 Kč3.375.922 Kč
79.364.535 Kč5.350.485 Kč431.844 Kč241.896 Kč3.760.783 Kč3.709.570 Kč
89.645.471 Kč5.222.196 Kč433.776 Kč249.156 Kč4.167.927 Kč4.051.583 Kč
99.934.835 Kč5.087.425 Kč435.780 Kč256.632 Kč4.590.438 Kč4.402.161 Kč
1010.232.880 Kč4.945.843 Kč437.844 Kč264.324 Kč5.028.932 Kč4.761.501 Kč

Thinking of letting it instead? Work out its cash flow

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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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