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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+1 zum Kauf, 73 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

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

Worked out for 73 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3,3 Mio. Kč

Rent: after 10 years2,3 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.064.379 Kč more than if you rented.

A month in the first year

Buying
22.577 Kča month
Renting
16.686 Kča month
Buying
Mortgage: 20.355 Kč · Owner's costs: 2.109 Kč · Upkeep: 1.988 Kč · Tax relief: −1.875 Kč
Cash on day one
971.450 Kč
Mortgage: 3.817.800 Kč

What you'd have after 10 years

If you buy
3.318.626 Kč
If you rent
2.254.247 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
14.915.418 Kč3.760.862 Kč270.924 Kč200.232 Kč1.021.827 Kč1.097.430 Kč
25.062.880 Kč3.701.046 Kč272.400 Kč206.244 Kč1.240.383 Kč1.224.209 Kč
35.214.766 Kč3.638.207 Kč273.924 Kč212.424 Kč1.467.269 Kč1.351.707 Kč
45.371.209 Kč3.572.194 Kč275.484 Kč218.796 Kč1.702.819 Kč1.479.806 Kč
55.532.346 Kč3.502.845 Kč277.092 Kč225.360 Kč1.947.382 Kč1.608.395 Kč
65.698.316 Kč3.429.992 Kč278.748 Kč232.128 Kč2.201.321 Kč1.737.349 Kč
75.869.266 Kč3.353.457 Kč280.464 Kč239.088 Kč2.465.011 Kč1.866.559 Kč
86.045.344 Kč3.273.053 Kč282.228 Kč246.264 Kč2.738.851 Kč1.995.878 Kč
96.226.704 Kč3.188.585 Kč284.040 Kč253.644 Kč3.023.246 Kč2.125.164 Kč
106.413.505 Kč3.099.850 Kč285.900 Kč261.252 Kč3.318.626 Kč2.254.247 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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