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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 3+1 flat for sale, 76 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

1,850,000 Kč of your own money. Under 36, banks may lend up to 90%.

Worked out for 76 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years6.1M Kč

Rent: after 10 years5.1M Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 981,950 Kč more than if you rented.

A month in the first year

Buying
43,621 Kča month
Renting
25,333 Kča month
Buying
Mortgage: 39,454 Kč · Owner's costs: 2,188 Kč · Upkeep: 3,854 Kč · Tax relief: −1,875 Kč
Cash on day one
1,867,000 Kč
Mortgage: 7,400,000 Kč

What you'd have after 10 years

If you buy
6,109,342 Kč
If you rent
5,127,392 Kč
Break-even
Year 4
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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
19,527,500 Kč7,289,635 Kč523,452 Kč303,996 Kč1,954,377 Kč2,167,877 Kč
29,813,325 Kč7,173,692 Kč525,636 Kč313,116 Kč2,350,578 Kč2,474,306 Kč
310,107,725 Kč7,051,892 Kč527,880 Kč322,512 Kč2,761,671 Kč2,786,305 Kč
410,410,956 Kč6,923,935 Kč530,184 Kč332,184 Kč3,188,250 Kč3,103,896 Kč
510,723,285 Kč6,789,512 Kč532,560 Kč342,156 Kč3,630,932 Kč3,427,089 Kč
611,044,984 Kč6,648,297 Kč535,008 Kč352,416 Kč4,090,359 Kč3,755,907 Kč
711,376,333 Kč6,499,946 Kč537,528 Kč362,988 Kč4,567,200 Kč4,090,351 Kč
811,717,623 Kč6,344,099 Kč540,120 Kč373,872 Kč5,062,153 Kč4,430,419 Kč
912,069,152 Kč6,180,377 Kč542,796 Kč385,092 Kč5,575,947 Kč4,776,104 Kč
1012,431,227 Kč6,008,381 Kč545,556 Kč396,648 Kč6,109,342 Kč5,127,392 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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