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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+1 zum Kauf, 106 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

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

Worked out for 106 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4,9 Mio. Kč

Rent: after 10 years4,2 Mio. Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 697.037 Kč more than if you rented.

A month in the first year

Buying
35.468 Kča month
Renting
20.551 Kča month
Buying
Mortgage: 31.299 Kč · Owner's costs: 2.986 Kč · Upkeep: 3.058 Kč · Tax relief: −1.875 Kč
Cash on day one
1.484.600 Kč
Mortgage: 5.870.400 Kč

What you'd have after 10 years

If you buy
4.891.546 Kč
If you rent
4.194.509 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
17.558.140 Kč5.782.843 Kč425.616 Kč246.612 Kč1.554.261 Kč1.732.364 Kč
27.784.884 Kč5.690.864 Kč427.788 Kč254.016 Kč1.872.553 Kč1.985.147 Kč
38.018.431 Kč5.594.236 Kč430.032 Kč261.636 Kč2.202.798 Kč2.243.016 Kč
48.258.984 Kč5.492.725 Kč432.336 Kč269.484 Kč2.545.465 Kč2.506.017 Kč
58.506.753 Kč5.386.084 Kč434.712 Kč277.560 Kč2.901.050 Kč2.774.209 Kč
68.761.956 Kč5.274.055 Kč437.160 Kč285.888 Kč3.270.068 Kč3.047.632 Kč
79.024.814 Kč5.156.364 Kč439.692 Kč294.468 Kč3.653.056 Kč3.326.337 Kč
89.295.559 Kč5.032.727 Kč442.284 Kč303.300 Kč4.050.572 Kč3.610.357 Kč
99.574.426 Kč4.902.842 Kč444.960 Kč312.396 Kč4.463.200 Kč3.899.736 Kč
109.861.658 Kč4.766.394 Kč447.720 Kč321.768 Kč4.891.546 Kč4.194.509 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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