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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+1 zum Kauf, 82 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

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

Worked out for 82 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,2 Mio. Kč

Rent: after 10 years2,2 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 979.945 Kč more than if you rented.

A month in the first year

Buying
22.005 Kča month
Renting
16.068 Kča month
Buying
Mortgage: 19.616 Kč · Owner's costs: 2.348 Kč · Upkeep: 1.916 Kč · Tax relief: −1.875 Kč
Cash on day one
936.800 Kč
Mortgage: 3.679.200 Kč

What you'd have after 10 years

If you buy
3.203.459 Kč
If you rent
2.223.514 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
14.736.970 Kč3.624.330 Kč264.060 Kč192.816 Kč985.219 Kč1.061.910 Kč
24.879.079 Kč3.566.685 Kč265.596 Kč198.600 Kč1.196.340 Kč1.188.054 Kč
35.025.451 Kč3.506.129 Kč267.180 Kč204.564 Kč1.415.495 Kč1.315.149 Kč
45.176.215 Kč3.442.511 Kč268.812 Kč210.696 Kč1.643.015 Kč1.443.120 Kč
55.331.501 Kč3.375.680 Kč270.492 Kč217.020 Kč1.879.226 Kč1.571.869 Kč
65.491.447 Kč3.305.472 Kč272.208 Kč223.524 Kč2.124.484 Kč1.701.291 Kč
75.656.190 Kč3.231.717 Kč273.996 Kč230.232 Kč2.379.147 Kč1.831.291 Kč
85.825.876 Kč3.154.233 Kč275.832 Kč237.144 Kč2.643.602 Kč1.961.746 Kč
96.000.652 Kč3.072.832 Kč277.704 Kč244.248 Kč2.918.241 Kč2.092.527 Kč
106.180.671 Kč2.987.318 Kč279.678 Kč251.580 Kč3.203.459 Kč2.223.514 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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