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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+kk flat for sale, 106 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

2,398,000 Kč of your own money. Under 36, banks may lend up to 90%.

Worked out for 106 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years7.9M Kč

Rent: after 10 years5.7M Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 2,258,506 Kč more than if you rented.

A month in the first year

Buying
57,248 Kča month
Renting
39,340 Kča month
Buying
Mortgage: 51,141 Kč · Owner's costs: 2,986 Kč · Upkeep: 4,996 Kč · Tax relief: −1,875 Kč
Cash on day one
2,415,000 Kč
Mortgage: 9,592,000 Kč

What you'd have after 10 years

If you buy
7,925,634 Kč
If you rent
5,667,128 Kč
Break-even
Year 3
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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
112,349,700 Kč9,448,942 Kč686,976 Kč472,080 Kč2,532,984 Kč2,733,534 Kč
212,720,191 Kč9,298,655 Kč689,856 Kč486,240 Kč3,046,413 Kč3,054,265 Kč
313,101,797 Kč9,140,773 Kč692,808 Kč500,832 Kč3,579,339 Kč3,376,943 Kč
413,494,851 Kč8,974,914 Kč695,856 Kč515,856 Kč4,132,540 Kč3,701,332 Kč
513,899,696 Kč8,800,674 Kč699,000 Kč531,336 Kč4,706,831 Kč4,027,164 Kč
614,316,687 Kč8,617,626 Kč702,240 Kč547,272 Kč5,303,063 Kč4,354,160 Kč
714,746,188 Kč8,425,330 Kč705,564 Kč563,688 Kč5,922,117 Kč4,681,996 Kč
815,188,573 Kč8,223,317 Kč708,996 Kč580,596 Kč6,564,915 Kč5,010,348 Kč
915,644,230 Kč8,011,093 Kč712,536 Kč598,020 Kč7,232,420 Kč5,338,854 Kč
1016,113,557 Kč7,788,145 Kč716,172 Kč615,960 Kč7,925,634 Kč5,667,128 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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