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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, 148 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

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

Worked out for 148 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years21,2 Mio. Kč

Rent: after 10 years24,2 Mio. Kč

The result

Renting comes out ahead over 10 years: you'd have 2.991.157 Kč more than if you bought.

A month in the first year

Buying
153.793 Kča month
Renting
50.191 Kča month
Buying
Mortgage: 138.076 Kč · Owner's costs: 4.104 Kč · Upkeep: 13.488 Kč · Tax relief: −1.875 Kč
Cash on day one
6.491.400 Kč
Mortgage: 25.897.600 Kč

What you'd have after 10 years

If you buy
21.172.688 Kč
If you rent
24.163.845 Kč
Break-even
Not within 10 years
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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
133.343.160 Kč25.511.363 Kč1.845.516 Kč602.292 Kč6.831.502 Kč8.017.321 Kč
234.343.455 Kč25.105.608 Kč1.851.852 Kč620.364 Kč8.207.543 Kč9.592.328 Kč
335.373.758 Kč24.679.346 Kč1.858.380 Kč638.976 Kč9.633.199 Kč11.218.033 Kč
436.434.971 Kč24.231.545 Kč1.865.088 Kč658.140 Kč11.110.377 Kč12.896.082 Kč
537.528.020 Kč23.761.115 Kč1.872.012 Kč677.880 Kč12.641.064 Kč14.628.204 Kč
638.653.861 Kč23.266.912 Kč1.879.140 Kč698.220 Kč14.227.333 Kč16.416.159 Kč
739.813.477 Kč22.747.734 Kč1.886.484 Kč719.172 Kč15.871.339 Kč18.261.776 Kč
841.007.881 Kč22.202.321 Kč1.894.044 Kč740.748 Kč17.575.324 Kč20.166.947 Kč
942.238.118 Kč21.629.346 Kč1.901.832 Kč762.960 Kč19.341.628 Kč22.133.638 Kč
1043.505.261 Kč21.027.415 Kč1.909.848 Kč785.856 Kč21.172.688 Kč24.163.845 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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