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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+kk zum Kauf, 82 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

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

Worked out for 82 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years11,7 Mio. Kč

Rent: after 10 years12,6 Mio. Kč

The result

Renting comes out ahead over 10 years: you'd have 927.110 Kč more than if you bought.

A month in the first year

Buying
84.280 Kča month
Renting
31.538 Kča month
Buying
Mortgage: 76.349 Kč · Owner's costs: 2.348 Kč · Upkeep: 7.458 Kč · Tax relief: −1.875 Kč
Cash on day one
3.597.000 Kč
Mortgage: 14.320.000 Kč

What you'd have after 10 years

If you buy
11.707.419 Kč
If you rent
12.634.529 Kč
Break-even
Not within 10 years
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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
118.437.000 Kč14.106.426 Kč1.011.360 Kč378.456 Kč3.777.464 Kč4.385.715 Kč
218.990.110 Kč13.882.061 Kč1.014.888 Kč389.808 Kč4.538.346 Kč5.198.011 Kč
319.559.813 Kč13.646.359 Kč1.018.536 Kč401.508 Kč5.326.660 Kč6.034.602 Kč
420.146.608 Kč13.398.745 Kč1.022.280 Kč413.544 Kč6.143.465 Kč6.896.212 Kč
520.751.006 Kč13.138.616 Kč1.026.132 Kč425.952 Kč6.989.860 Kč7.783.576 Kč
621.373.536 Kč12.865.343 Kč1.030.104 Kč438.732 Kč7.866.987 Kč8.697.465 Kč
722.014.742 Kč12.578.260 Kč1.034.208 Kč451.896 Kč8.776.040 Kč9.638.686 Kč
822.675.184 Kč12.276.671 Kč1.038.420 Kč465.456 Kč9.718.257 Kč10.608.037 Kč
923.355.440 Kč11.959.842 Kč1.042.752 Kč479.412 Kč10.694.935 Kč11.606.363 Kč
1024.056.103 Kč11.627.001 Kč1.047.228 Kč493.800 Kč11.707.419 Kč12.634.529 Kč

Thinking of letting it instead? Work out its cash flow

Reader poll

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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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