Should you rent or buy?

Whether buying beats renting depends on four things: how many years of rent the home costs, how long you'll stay, what your money would earn elsewhere, and what the home's value does. The last one matters most and is the one nobody knows. The calculator compares the same home bought with a mortgage or rented, year by year. It shows the year from which buying leaves you ahead, if it does, so you can see which assumption your answer rests on.

How the comparison works

Picture two households that start with the same savings. One buys the home. It pays the down payment and the purchase costs on day one, then each month the mortgage, the owner's costs (the building's repair fund, its administration, insurance and property tax) and upkeep inside the flat. Once a year, the tax relief on the interest comes back.

The other rents the same home and invests the money the buyer put down. Each month, whichever household pays less invests the difference, and both pots earn the same return. The rent rises once a year. Charges for services such as heating and water are left out, because owners pay them too.

At the end of each year the calculator asks what each household would have if it stopped there. The buyer sells: the home's value, less the mortgage still owed and the selling costs, plus anything they invested. The renter has their investments.

How to use it

Start from an area, from a flat for sale or by hand:

1. Start from an area fills in a typical flat there, at the area's median asking price and rent per m² today. Pick a town, district or neighbourhood, and a layout.
2. From a listing, a flat for sale on Bytky opens the calculator with its asking price, floor area and Bytky's rent estimate.
3. By hand, put in the price, the floor area and the rent the same home would let for, without the charges.

Under "If you buy", set the down payment, the mortgage rate and the term. The owner's costs are worked out from the floor area; replace them if you know the building's figures. Leave the tax relief on if you pay income tax in Czechia.

Under "Over the years", set how long you'd stay, how fast the home's value and the rent grow, the return on savings and the selling costs.

Reading the result

The sentence at the top gives the answer: buying comes out ahead from a given year, or renting comes out ahead over your stay, and by how much. The chart follows both households year by year. Where the lines cross is the break-even year.

"A month in the first year" sets the two monthly bills side by side: for the buyer, the mortgage, the owner's costs and upkeep, less the tax relief; for the renter, the rent. "Cash on day one" is what the buyer needs before the keys: the down payment and the purchase costs. The renter keeps that money invested.

A worked example

A 60 m² flat costs 6,000,000 Kč and would let for 20,000 Kč a month, 25 years of rent. The buyer puts down 20 % over a 30-year term. Say their bank offers 5 % (your own rate will differ).

• Day one. The buyer pays 1,217,000 Kč: 1,200,000 Kč down and 17,000 Kč of purchase costs. The mortgage is 4,800,000 Kč.
• A month in the first year. The mortgage is 25,767 Kč, the owner's costs 1,763 Kč and upkeep 2,500 Kč, less 1,875 Kč of tax relief: 28,155 Kč against 20,000 Kč of rent. The renter invests the difference each month.

With the calculator's starting assumptions (value and rent each up 3 % a year, savings earning 4 %), buying comes out ahead from the second year. After ten years the buyer is about 1,227,000 Kč better off.

Now change one assumption at a time and keep the rest:

The same flat flips from a clear win for buying to a loss when the home's value stops growing. That's why the answer rests on what you believe about prices more than on the rent or the rate.

How many years of rent a home costs differs a lot from place to place. Here is Prague's market at a glance:

What tips the balance

• Years of rent. Divide the price by a year's rent. The more years of rent a home costs, the longer buying takes to catch up.
• How long you stay. Buying costs about 17,000 Kč in fees up front, and selling through an agency usually 3–5 % of the price. Spread over two years, that's a lot; over fifteen, it's little.
• What the home's value does. A mortgage multiplies a change in value: on a home bought with 20 % down, a 1 % rise in its value is a 5 % gain on the down payment, and a fall works the same way.
• What your savings would earn. The higher the return, the more renting and investing the difference pays.
• The tax relief. It brings back 15 % of the interest you deduct each year, if you pay income tax at the basic rate.

The rules behind it

A bank lends at most 80 % of a home's value, or 90 % to applicants under 36 buying their own home, so you put down at least 20 % (10 % under 36).¹ On top come the cadastre fee of 2,000 Kč and a lawyer for the contract and escrow; Czechia has had no property transfer tax since 2020.

Interest on a loan for your own home lowers your income tax base by up to 150,000 Kč a year for loans taken out from 2021, or 300,000 Kč for older ones, per household.² At the 15 % rate that's up to 22,500 Kč a year back. The renter's investments aren't taxed in the calculator: gains on shares and funds held for over three years are free of income tax in Czechia.³

Mistakes people make

• Comparing the rent with the mortgage payment. Part of the payment repays the loan and stays yours. The owner's costs and upkeep don't.
• Leaving out what the down payment would earn. Money put into a home isn't earning anything else, and that's a real cost.
• Counting the service charges on one side. Heating, water and the lift cost a tenant and an owner the same.
• Trusting past price growth. Prices that rose fast for years can stand still for years. Run the calculator with no growth, and decide whether you'd still buy.
• Forgetting the exit. If you might move within a few years, the costs of buying and selling can outweigh everything else.

What to do next

See what a bank would lend you with the mortgage calculator, and check a flat's asking price against similar flats nearby with the price check. Our guides cover what buying a flat costs and what renting in Prague costs.

Sources

1. ČNB, binding limits for mortgage loans: LTV at most 80 %, 90 % for applicants under 36 buying their own home; left unchanged on 4 June 2026. ↩

2. Income Tax Act (586/1992 Coll.) §15(3)–(4). ↩

3. Income Tax Act (586/1992 Coll.) §4(1)(w): income from selling securities held for more than three years is exempt. ↩