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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, 120 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

4,318,000 Kč of your own money. Under 36, banks may lend up to 90%.

Worked out for 120 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years14.1M Kč

Rent: after 10 years13.1M Kč

The result

Buying comes out ahead from year 6. After 10 years you'd have 1,056,142 Kč more than if you rented.

A month in the first year

Buying
102,568 Kča month
Renting
51,923 Kča month
Buying
Mortgage: 92,088 Kč · Owner's costs: 3,359 Kč · Upkeep: 8,996 Kč · Tax relief: −1,875 Kč
Cash on day one
4,335,000 Kč
Mortgage: 17,272,000 Kč

What you'd have after 10 years

If you buy
14,120,851 Kč
If you rent
13,064,709 Kč
Break-even
Year 6
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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
122,237,700 Kč17,014,401 Kč1,230,816 Kč623,076 Kč4,556,168 Kč5,127,613 Kč
222,904,831 Kč16,743,783 Kč1,235,268 Kč641,772 Kč5,473,903 Kč5,937,426 Kč
323,591,976 Kč16,459,491 Kč1,239,840 Kč661,020 Kč6,424,726 Kč6,764,690 Kč
424,299,735 Kč16,160,832 Kč1,244,556 Kč680,856 Kč7,409,911 Kč7,609,648 Kč
525,028,727 Kč15,847,081 Kč1,249,416 Kč701,280 Kč8,430,784 Kč8,472,558 Kč
625,779,589 Kč15,517,475 Kč1,254,432 Kč722,316 Kč9,488,726 Kč9,353,672 Kč
726,552,977 Kč15,171,211 Kč1,259,580 Kč743,988 Kč10,585,177 Kč10,253,206 Kč
827,349,566 Kč14,807,450 Kč1,264,896 Kč766,308 Kč11,721,629 Kč11,171,408 Kč
928,170,053 Kč14,425,305 Kč1,270,368 Kč789,300 Kč12,899,646 Kč12,108,499 Kč
1029,015,155 Kč14,023,849 Kč1,276,008 Kč812,976 Kč14,120,851 Kč13,064,709 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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