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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+kk zum Kauf, 136 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

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

Worked out for 136 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years14,3 Mio. Kč

Rent: after 10 years13,9 Mio. Kč

The result

Buying comes out ahead from year 8. After 10 years you'd have 399.218 Kč more than if you rented.

A month in the first year

Buying
104.031 Kča month
Renting
48.854 Kča month
Buying
Mortgage: 93.034 Kč · Owner's costs: 3.784 Kč · Upkeep: 9.088 Kč · Tax relief: −1.875 Kč
Cash on day one
4.379.400 Kč
Mortgage: 17.449.600 Kč

What you'd have after 10 years

If you buy
14.265.913 Kč
If you rent
13.866.695 Kč
Break-even
Year 8
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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
122.466.360 Kč17.189.362 Kč1.248.372 Kč586.248 Kč4.603.007 Kč5.229.163 Kč
223.140.351 Kč16.915.974 Kč1.253.016 Kč603.840 Kč5.530.166 Kč6.099.732 Kč
323.834.561 Kč16.628.770 Kč1.257.792 Kč621.948 Kč6.490.754 Kč6.991.549 Kč
424.549.598 Kč16.327.052 Kč1.262.700 Kč640.608 Kč7.486.058 Kč7.905.037 Kč
525.286.086 Kč16.010.087 Kč1.267.764 Kč659.832 Kč8.517.416 Kč8.840.647 Kč
626.044.669 Kč15.677.105 Kč1.272.984 Kč679.620 Kč9.586.224 Kč9.798.847 Kč
726.826.009 Kč15.327.294 Kč1.278.360 Kč700.008 Kč10.693.935 Kč10.780.091 Kč
827.630.789 Kč14.959.806 Kč1.283.892 Kč721.008 Kč11.842.059 Kč11.784.835 Kč
928.459.713 Kč14.573.751 Kč1.289.592 Kč742.644 Kč13.032.171 Kč12.813.542 Kč
1029.313.504 Kč14.168.186 Kč1.295.460 Kč764.916 Kč14.265.913 Kč13.866.695 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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