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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 2+kk zum Kauf, 56 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

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

Worked out for 56 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4,9 Mio. Kč

Rent: after 10 years3,4 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.488.631 Kč more than if you rented.

A month in the first year

Buying
33.487 Kča month
Renting
23.692 Kča month
Buying
Mortgage: 30.706 Kč · Owner's costs: 1.656 Kč · Upkeep: 3.000 Kč · Tax relief: −1.875 Kč
Cash on day one
1.456.800 Kč
Mortgage: 5.759.200 Kč

What you'd have after 10 years

If you buy
4.869.474 Kč
If you rent
3.380.843 Kč
Break-even
Year 2
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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
17.414.970 Kč5.673.305 Kč401.844 Kč284.304 Kč1.530.046 Kč1.645.991 Kč
27.637.419 Kč5.583.070 Kč403.524 Kč292.836 Kč1.847.890 Kč1.836.344 Kč
37.866.542 Kč5.488.276 Kč405.240 Kč301.620 Kč2.177.831 Kč2.027.704 Kč
48.102.538 Kč5.388.689 Kč407.028 Kč310.668 Kč2.520.351 Kč2.219.931 Kč
58.345.614 Kč5.284.070 Kč408.852 Kč319.992 Kč2.875.957 Kč2.412.835 Kč
68.595.982 Kč5.174.166 Kč410.736 Kč329.592 Kč3.245.173 Kč2.606.242 Kč
78.853.862 Kč5.058.708 Kč412.692 Kč339.468 Kč3.628.546 Kč2.799.981 Kč
89.119.478 Kč4.937.413 Kč414.684 Kč349.656 Kč4.026.655 Kč2.993.808 Kč
99.393.062 Kč4.809.991 Kč416.748 Kč360.144 Kč4.440.088 Kč3.187.512 Kč
109.674.854 Kč4.676.128 Kč418.872 Kč370.956 Kč4.869.474 Kč3.380.843 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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