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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 2+1 flat for sale, 43 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

1,246,000 Kč of your own money. Under 36, banks may lend up to 90%.

Worked out for 43 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years4.3M Kč

Rent: after 10 years2.9M Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1,331,346 Kč more than if you rented.

A month in the first year

Buying
28,605 Kča month
Renting
20,441 Kča month
Buying
Mortgage: 26,573 Kč · Owner's costs: 1,311 Kč · Upkeep: 2,596 Kč · Tax relief: −1,875 Kč
Cash on day one
1,263,000 Kč
Mortgage: 4,984,000 Kč

What you'd have after 10 years

If you buy
4,251,239 Kč
If you rent
2,919,893 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
16,416,900 Kč4,909,666 Kč343,260 Kč245,292 Kč1,327,188 Kč1,426,142 Kč
26,609,407 Kč4,831,575 Kč344,664 Kč252,648 Kč1,605,466 Kč1,590,245 Kč
36,807,689 Kč4,749,537 Kč346,104 Kč260,232 Kč1,894,343 Kč1,755,169 Kč
47,011,920 Kč4,663,354 Kč347,604 Kč268,032 Kč2,194,241 Kč1,920,800 Kč
57,222,277 Kč4,572,815 Kč349,140 Kč276,084 Kč2,505,605 Kč2,086,964 Kč
67,438,946 Kč4,477,703 Kč350,712 Kč284,364 Kč2,828,895 Kč2,253,504 Kč
77,662,114 Kč4,377,783 Kč352,356 Kč292,896 Kč3,164,591 Kč2,420,266 Kč
87,891,978 Kč4,272,813 Kč354,036 Kč301,680 Kč3,513,195 Kč2,587,057 Kč
98,128,737 Kč4,162,540 Kč355,752 Kč310,728 Kč3,875,229 Kč2,753,666 Kč
108,372,599 Kč4,046,693 Kč357,540 Kč320,052 Kč4,251,239 Kč2,919,893 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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