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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, 61 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

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

Worked out for 61 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years5,7 Mio. Kč

Rent: after 10 years5 Mio. Kč

The result

Buying comes out ahead from year 5. After 10 years you'd have 657.308 Kč more than if you rented.

A month in the first year

Buying
40.309 Kča month
Renting
21.726 Kča month
Buying
Mortgage: 36.800 Kč · Owner's costs: 1.789 Kč · Upkeep: 3.595 Kč · Tax relief: −1.875 Kč
Cash on day one
1.742.570 Kč
Mortgage: 6.902.280 Kč

What you'd have after 10 years

If you buy
5.694.045 Kč
If you rent
5.036.737 Kč
Break-even
Year 5
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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
18.886.686 Kč6.799.342 Kč483.708 Kč260.712 Kč1.822.785 Kč2.041.780 Kč
29.153.286 Kč6.691.203 Kč485.652 Kč268.536 Kč2.192.140 Kč2.347.461 Kč
39.427.885 Kč6.577.597 Kč487.644 Kč276.588 Kč2.575.330 Kč2.659.704 Kč
49.710.721 Kč6.458.253 Kč489.696 Kč284.892 Kč2.972.898 Kč2.978.592 Kč
510.002.043 Kč6.332.876 Kč491.820 Kč293.436 Kč3.385.421 Kč3.304.233 Kč
610.302.104 Kč6.201.164 Kč494.004 Kč302.232 Kč3.813.489 Kč3.636.719 Kč
710.611.167 Kč6.062.796 Kč496.260 Kč311.304 Kč4.257.724 Kč3.976.132 Kč
810.929.502 Kč5.917.437 Kč498.564 Kč320.640 Kč4.718.774 Kč4.322.548 Kč
911.257.387 Kč5.764.731 Kč500.952 Kč330.264 Kč5.197.313 Kč4.676.055 Kč
1011.595.109 Kč5.604.307 Kč503.412 Kč340.176 Kč5.694.045 Kč5.036.737 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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