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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, 47 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

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

Worked out for 47 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,4 Mio. Kč

Rent: after 10 years3,1 Mio. Kč

The result

Buying comes out ahead from year 5. After 10 years you'd have 283.802 Kč more than if you rented.

A month in the first year

Buying
22.908 Kča month
Renting
11.750 Kča month
Buying
Mortgage: 21.287 Kč · Owner's costs: 1.417 Kč · Upkeep: 2.079 Kč · Tax relief: −1.875 Kč
Cash on day one
1.015.130 Kč
Mortgage: 3.992.520 Kč

What you'd have after 10 years

If you buy
3.391.249 Kč
If you rent
3.107.447 Kč
Break-even
Year 5
Find homes on the map

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
15.140.370 Kč3.932.971 Kč274.896 Kč141.000 Kč1.062.655 Kč1.201.945 Kč
25.294.581 Kč3.870.413 Kč276.156 Kč145.236 Kč1.284.892 Kč1.393.451 Kč
35.453.418 Kč3.804.693 Kč277.452 Kč149.592 Kč1.515.435 Kč1.589.756 Kč
45.617.021 Kč3.735.653 Kč278.784 Kč154.080 Kč1.754.616 Kč1.790.963 Kč
55.785.531 Kč3.663.123 Kč280.164 Kč158.700 Kč2.002.774 Kč1.997.189 Kč
65.959.097 Kč3.586.928 Kč281.592 Kč163.452 Kč2.260.265 Kč2.208.557 Kč
76.137.870 Kč3.506.881 Kč283.044 Kč168.360 Kč2.527.465 Kč2.425.148 Kč
86.322.006 Kč3.422.790 Kč284.544 Kč173.412 Kč2.804.757 Kč2.647.083 Kč
96.511.666 Kč3.334.449 Kč286.092 Kč178.620 Kč3.092.545 Kč2.874.473 Kč
106.707.016 Kč3.241.644 Kč287.688 Kč183.972 Kč3.391.249 Kč3.107.447 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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