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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 4+kk zum Kauf, 76 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

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

Worked out for 76 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,9 Mio. Kč

Rent: after 10 years3,2 Mio. Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 650.770 Kč more than if you rented.

A month in the first year

Buying
26.977 Kča month
Renting
16.150 Kča month
Buying
Mortgage: 24.291 Kč · Owner's costs: 2.188 Kč · Upkeep: 2.373 Kč · Tax relief: −1.875 Kč
Cash on day one
1.156.000 Kč
Mortgage: 4.556.000 Kč

What you'd have after 10 years

If you buy
3.861.286 Kč
If you rent
3.210.516 Kč
Break-even
Year 4
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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
15.865.850 Kč4.488.051 Kč323.724 Kč193.800 Kč1.211.621 Kč1.344.737 Kč
26.041.826 Kč4.416.668 Kč325.368 Kč199.620 Kč1.464.239 Kč1.537.119 Kč
36.223.080 Kč4.341.678 Kč327.060 Kč205.608 Kč1.726.363 Kč1.733.180 Kč
46.409.773 Kč4.262.898 Kč328.800 Kč211.776 Kč1.998.374 Kč1.932.944 Kč
56.602.066 Kč4.180.135 Kč330.600 Kč218.124 Kč2.280.665 Kč2.136.447 Kč
66.800.128 Kč4.093.190 Kč332.448 Kč224.664 Kč2.573.645 Kč2.343.703 Kč
77.004.132 Kč4.001.852 Kč334.344 Kč231.408 Kč2.877.742 Kč2.554.718 Kč
87.214.256 Kč3.905.897 Kč336.300 Kč238.344 Kč3.193.403 Kč2.769.517 Kč
97.430.683 Kč3.805.094 Kč338.328 Kč245.496 Kč3.521.089 Kč2.988.118 Kč
107.653.604 Kč3.699.197 Kč340.404 Kč252.864 Kč3.861.286 Kč3.210.516 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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