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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 1+kk flat for sale, 29 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

1,240,000 Kč of your own money. Under 36, banks may lend up to 90%.

Worked out for 29 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4.2M Kč

Rent: after 10 years3.5M Kč

The result

Buying comes out ahead from year 4. After 10 years you'd have 631,953 Kč more than if you rented.

A month in the first year

Buying
28,091 Kča month
Renting
15,809 Kča month
Buying
Mortgage: 26,445 Kč · Owner's costs: 938 Kč · Upkeep: 2,583 Kč · Tax relief: −1,875 Kč
Cash on day one
1,257,000 Kč
Mortgage: 4,960,000 Kč

What you'd have after 10 years

If you buy
4,175,250 Kč
If you rent
3,543,297 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
16,386,000 Kč4,886,025 Kč337,092 Kč189,708 Kč1,316,738 Kč1,466,099 Kč
26,577,580 Kč4,808,311 Kč338,364 Kč195,396 Kč1,589,330 Kč1,679,435 Kč
36,774,907 Kč4,726,669 Kč339,672 Kč201,264 Kč1,872,165 Kč1,897,040 Kč
46,978,155 Kč4,640,900 Kč341,016 Kč207,300 Kč2,165,653 Kč2,118,963 Kč
57,187,499 Kč4,550,799 Kč342,408 Kč213,516 Kč2,470,212 Kč2,345,254 Kč
67,403,124 Kč4,456,145 Kč343,824 Kč219,924 Kč2,786,287 Kč2,575,929 Kč
77,625,218 Kč4,356,706 Kč345,300 Kč226,524 Kč3,114,340 Kč2,811,041 Kč
87,853,975 Kč4,252,244 Kč346,812 Kč233,316 Kč3,454,848 Kč3,050,621 Kč
98,089,594 Kč4,142,501 Kč348,360 Kč240,312 Kč3,808,311 Kč3,294,691 Kč
108,332,282 Kč4,027,214 Kč349,980 Kč247,524 Kč4,175,250 Kč3,543,297 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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