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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 1+kk zum Kauf, 33 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

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

Worked out for 33 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years1,5 Mio. Kč

Rent: after 10 years772.765 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 739.366 Kč more than if you rented.

A month in the first year

Buying
9.889 Kča month
Renting
9.075 Kča month
Buying
Mortgage: 9.000 Kč · Owner's costs: 1.045 Kč · Upkeep: 879 Kč · Tax relief: −1.035 Kč
Cash on day one
439.000 Kč
Mortgage: 1.688.000 Kč

What you'd have after 10 years

If you buy
1.512.131 Kč
If you rent
772.765 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
12.173.300 Kč1.662.821 Kč118.665 Kč108.900 Kč455.854 Kč477.303 Kč
22.238.499 Kč1.636.371 Kč119.551 Kč112.164 Kč556.568 Kč514.737 Kč
32.305.654 Kč1.608.583 Kč120.460 Kč115.536 Kč660.979 Kč551.178 Kč
42.374.824 Kč1.579.393 Kč121.402 Kč118.992 Kč769.223 Kč586.531 Kč
52.446.068 Kč1.548.726 Kč122.392 Kč122.568 Kč881.446 Kč620.672 Kč
62.519.450 Kč1.516.511 Kč123.392 Kč126.240 Kč997.799 Kč653.464 Kč
72.595.034 Kč1.482.668 Kč124.440 Kč130.032 Kč1.118.440 Kč684.774 Kč
82.672.885 Kč1.447.116 Kč125.525 Kč133.932 Kč1.243.526 Kč714.465 Kč
92.753.071 Kč1.409.767 Kč126.646 Kč137.952 Kč1.373.892 Kč743.043 Kč
102.835.664 Kč1.370.529 Kč127.806 Kč142.092 Kč1.512.131 Kč772.765 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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