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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+1 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

698.000 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 years2,5 Mio. Kč

Rent: after 10 years1,6 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 880.191 Kč more than if you rented.

A month in the first year

Buying
16.231 Kča month
Renting
12.729 Kča month
Buying
Mortgage: 14.886 Kč · Owner's costs: 1.603 Kč · Upkeep: 1.454 Kč · Tax relief: −1.712 Kč
Cash on day one
715.000 Kč
Mortgage: 2.792.000 Kč

What you'd have after 10 years

If you buy
2.464.397 Kč
If you rent
1.584.206 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
13.594.700 Kč2.750.359 Kč194.767 Kč152.748 Kč751.835 Kč802.093 Kč
23.702.541 Kč2.706.612 Kč196.187 Kč157.332 Kč916.110 Kč889.416 Kč
33.813.617 Kč2.660.655 Kč197.659 Kč162.048 Kč1.086.336 Kč976.889 Kč
43.928.026 Kč2.612.376 Kč199.171 Kč166.908 Kč1.262.738 Kč1.064.406 Kč
54.045.867 Kč2.561.657 Kč200.737 Kč171.924 Kč1.445.547 Kč1.151.856 Kč
64.167.243 Kč2.508.375 Kč202.369 Kč177.072 Kč1.635.001 Kč1.239.158 Kč
74.292.260 Kč2.452.401 Kč204.033 Kč182.388 Kč1.831.349 Kč1.326.161 Kč
84.421.028 Kč2.393.597 Kč205.778 Kč187.860 Kč2.034.851 Kč1.412.761 Kč
94.553.658 Kč2.331.822 Kč207.579 Kč193.500 Kč2.245.774 Kč1.498.821 Kč
104.690.268 Kč2.266.927 Kč209.439 Kč199.296 Kč2.464.397 Kč1.584.206 Kč

Thinking of letting it instead? Work out its cash flow

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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