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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+1 zum Kauf, 62 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

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

Worked out for 62 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years2,2 Mio. Kč

Rent: after 10 years1,2 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.054.411 Kč more than if you rented.

A month in the first year

Buying
15.019 Kča month
Renting
13.433 Kča month
Buying
Mortgage: 13.436 Kč · Owner's costs: 1.816 Kč · Upkeep: 1.313 Kč · Tax relief: −1.546 Kč
Cash on day one
647.000 Kč
Mortgage: 2.520.000 Kč

What you'd have after 10 years

If you buy
2.245.922 Kč
If you rent
1.191.511 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
13.244.500 Kč2.482.413 Kč180.233 Kč161.196 Kč680.167 Kč708.016 Kč
23.341.835 Kč2.442.926 Kč181.634 Kč166.032 Kč830.126 Kč767.995 Kč
33.442.090 Kč2.401.445 Kč183.097 Kč171.012 Kč985.571 Kč826.806 Kč
43.545.353 Kč2.357.865 Kč184.600 Kč176.148 Kč1.146.717 Kč884.278 Kč
53.651.713 Kč2.312.084 Kč186.166 Kč181.428 Kč1.313.772 Kč940.269 Kč
63.761.265 Kč2.263.990 Kč187.785 Kč186.876 Kč1.486.959 Kč994.595 Kč
73.874.103 Kč2.213.465 Kč189.446 Kč192.480 Kč1.666.513 Kč1.047.067 Kč
83.990.326 Kč2.160.385 Kč191.173 Kč198.252 Kč1.852.674 Kč1.097.498 Kč
94.110.036 Kč2.104.624 Kč192.967 Kč204.204 Kč2.045.691 Kč1.145.684 Kč
104.233.337 Kč2.046.046 Kč194.818 Kč210.324 Kč2.245.922 Kč1.191.511 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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