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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 3+1 zum Kauf, 64 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

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

Worked out for 64 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years2,7 Mio. Kč

Rent: after 10 years1,4 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.339.063 Kč more than if you rented.

A month in the first year

Buying
17.753 Kča month
Renting
16.239 Kča month
Buying
Mortgage: 16.165 Kč · Owner's costs: 1.869 Kč · Upkeep: 1.579 Kč · Tax relief: −1.860 Kč
Cash on day one
775.000 Kč
Mortgage: 3.032.000 Kč

What you'd have after 10 years

If you buy
2.713.655 Kč
If you rent
1.374.592 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
13.903.700 Kč2.986.786 Kč213.041 Kč194.868 Kč818.744 Kč843.851 Kč
24.020.811 Kč2.939.288 Kč214.632 Kč200.712 Kč999.579 Kč911.159 Kč
34.141.435 Kč2.889.390 Kč216.264 Kč206.736 Kč1.187.046 Kč976.718 Kč
44.265.678 Kč2.836.970 Kč217.962 Kč212.940 Kč1.381.398 Kč1.040.332 Kč
54.393.649 Kč2.781.901 Kč219.715 Kč219.324 Kč1.582.893 Kč1.101.791 Kč
64.525.458 Kč2.724.050 Kč221.537 Kč225.900 Kč1.791.797 Kč1.160.873 Kč
74.661.222 Kč2.663.275 Kč223.415 Kč232.680 Kč2.008.397 Kč1.217.326 Kč
84.801.059 Kč2.599.428 Kč225.352 Kč239.664 Kč2.232.984 Kč1.270.888 Kč
94.945.090 Kč2.532.354 Kč227.360 Kč246.852 Kč2.466.283 Kč1.321.723 Kč
105.093.443 Kč2.461.892 Kč229.440 Kč254.256 Kč2.713.655 Kč1.374.592 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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