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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, 49 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

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

Worked out for 49 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4,3 Mio. Kč

Rent: after 10 years3,4 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 861.712 Kč more than if you rented.

A month in the first year

Buying
29.194 Kča month
Renting
17.967 Kča month
Buying
Mortgage: 26.965 Kč · Owner's costs: 1.470 Kč · Upkeep: 2.634 Kč · Tax relief: −1.875 Kč
Cash on day one
1.281.375 Kč
Mortgage: 5.057.500 Kč

What you'd have after 10 years

If you buy
4.270.206 Kč
If you rent
3.408.494 Kč
Break-even
Year 3
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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
16.511.531 Kč4.982.069 Kč350.328 Kč215.604 Kč1.343.514 Kč1.479.614 Kč
26.706.877 Kč4.902.825 Kč351.804 Kč222.072 Kč1.622.434 Kč1.681.116 Kč
36.908.084 Kč4.819.576 Kč353.340 Kč228.732 Kč1.911.877 Kč1.885.887 Kč
47.115.326 Kč4.732.122 Kč354.888 Kč235.596 Kč2.212.265 Kč2.093.880 Kč
57.328.786 Kč4.640.250 Kč356.520 Kč242.664 Kč2.524.031 Kč2.305.110 Kč
67.548.649 Kč4.543.732 Kč358.176 Kč249.948 Kč2.847.637 Kč2.519.528 Kč
77.775.109 Kč4.442.338 Kč359.880 Kč257.448 Kč3.183.553 Kč2.737.105 Kč
88.008.362 Kč4.335.821 Kč361.656 Kč265.164 Kč3.532.271 Kč2.957.831 Kč
98.248.613 Kč4.223.921 Kč363.468 Kč273.120 Kč3.894.310 Kč3.181.642 Kč
108.496.071 Kč4.106.365 Kč365.340 Kč281.316 Kč4.270.206 Kč3.408.494 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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