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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, 26 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

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

Worked out for 26 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 829.473 Kč more than if you rented.

A month in the first year

Buying
27.028 Kča month
Renting
16.490 Kča month
Buying
Mortgage: 25.549 Kč · Owner's costs: 858 Kč · Upkeep: 2.496 Kč · Tax relief: −1.875 Kč
Cash on day one
1.215.000 Kč
Mortgage: 4.792.000 Kč

What you'd have after 10 years

If you buy
4.060.179 Kč
If you rent
3.230.706 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
16.169.700 Kč4.720.534 Kč324.336 Kč197.880 Kč1.274.162 Kč1.402.855 Kč
26.354.791 Kč4.645.455 Kč325.548 Kč203.820 Kč1.539.663 Kč1.593.803 Kč
36.545.435 Kč4.566.581 Kč326.796 Kč209.928 Kč1.815.187 Kč1.787.846 Kč
46.741.798 Kč4.483.722 Kč328.068 Kč216.228 Kč2.101.131 Kč1.984.951 Kč
56.944.052 Kč4.396.676 Kč329.388 Kč222.720 Kč2.397.912 Kč2.185.104 Kč
67.152.373 Kč4.305.231 Kč330.744 Kč229.392 Kč2.705.962 Kč2.388.294 Kč
77.366.944 Kč4.209.166 Kč332.148 Kč236.280 Kč3.025.732 Kč2.594.484 Kč
87.587.953 Kč4.108.248 Kč333.600 Kč243.372 Kč3.357.693 Kč2.803.649 Kč
97.815.591 Kč4.002.228 Kč335.076 Kč250.668 Kč3.702.338 Kč3.015.741 Kč
108.050.059 Kč3.890.850 Kč336.600 Kč258.192 Kč4.060.179 Kč3.230.706 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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