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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, 29 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

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

Worked out for 29 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4,1 Mio. Kč

Rent: after 10 years3,2 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 855.622 Kč more than if you rented.

A month in the first year

Buying
27.150 Kča month
Renting
16.745 Kča month
Buying
Mortgage: 25.587 Kč · Owner's costs: 938 Kč · Upkeep: 2.500 Kč · Tax relief: −1.875 Kč
Cash on day one
1.216.800 Kč
Mortgage: 4.799.200 Kč

What you'd have after 10 years

If you buy
4.067.882 Kč
If you rent
3.212.260 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
16.178.970 Kč4.727.631 Kč325.800 Kč200.940 Kč1.276.190 Kč1.403.234 Kč
26.364.339 Kč4.652.444 Kč327.036 Kč206.964 Kč1.542.213 Kč1.592.650 Kč
36.555.269 Kč4.573.459 Kč328.308 Kč213.180 Kč1.818.281 Kč1.785.020 Kč
46.751.927 Kč4.490.483 Kč329.616 Kč219.576 Kč2.104.795 Kč1.980.329 Kč
56.954.485 Kč4.403.314 Kč330.972 Kč226.164 Kč2.402.172 Kč2.178.559 Kč
67.163.120 Kč4.311.737 Kč332.364 Kč232.944 Kč2.710.851 Kč2.379.680 Kč
77.378.013 Kč4.215.533 Kč333.804 Kč239.928 Kč3.031.278 Kč2.583.664 Kč
87.599.354 Kč4.114.469 Kč335.280 Kč247.128 Kč3.363.927 Kč2.790.456 Kč
97.827.334 Kč4.008.298 Kč336.792 Kč254.544 Kč3.709.291 Kč3.000.000 Kč
108.062.154 Kč3.896.761 Kč338.364 Kč262.176 Kč4.067.882 Kč3.212.260 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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