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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 4+kk zum Kauf, 119 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

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

Worked out for 119 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years12,1 Mio. Kč

Rent: after 10 years10,4 Mio. Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 1.712.492 Kč more than if you rented.

A month in the first year

Buying
88.073 Kča month
Renting
49.583 Kča month
Buying
Mortgage: 78.908 Kč · Owner's costs: 3.332 Kč · Upkeep: 7.708 Kč · Tax relief: −1.875 Kč
Cash on day one
3.717.000 Kč
Mortgage: 14.800.000 Kč

What you'd have after 10 years

If you buy
12.099.817 Kč
If you rent
10.387.325 Kč
Break-even
Year 4
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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
119.055.000 Kč14.579.271 Kč1.056.876 Kč594.996 Kč3.904.079 Kč4.336.377 Kč
219.626.650 Kč14.347.388 Kč1.060.860 Kč612.840 Kč4.690.462 Kč4.966.418 Kč
320.215.450 Kč14.103.786 Kč1.064.952 Kč631.236 Kč5.505.200 Kč5.607.095 Kč
420.821.913 Kč13.847.874 Kč1.069.164 Kč650.172 Kč6.349.382 Kč6.258.408 Kč
521.446.570 Kč13.579.030 Kč1.073.508 Kč669.672 Kč7.224.143 Kč6.920.341 Kč
622.089.967 Kč13.296.601 Kč1.077.984 Kč689.760 Kč8.130.667 Kč7.592.855 Kč
722.752.667 Kč12.999.898 Kč1.082.592 Kč710.460 Kč9.070.189 Kč8.275.885 Kč
823.435.247 Kč12.688.202 Kč1.087.332 Kč731.772 Kč10.043.988 Kč8.969.362 Kč
924.138.304 Kč12.360.753 Kč1.092.228 Kč753.720 Kč11.053.402 Kč9.673.216 Kč
1024.862.453 Kč12.016.762 Kč1.097.268 Kč776.340 Kč12.099.817 Kč10.387.325 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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