Comparison parameters
Left side — mortgage. Right — renting.
Buy or rent in Czech Republic — what works for you?
"Renting is throwing money away" — every potential homebuyer hears it. The truth is more nuanced. In Prague especially, with rents 3–4 % of property value, renting can come out ahead even over 10 years. In smaller cities (rents 5–7 % of value), buying tends to win.
The 5 % rule
Internationally used rule: if annual rent is under 5 % of the property's value, renting wins economically. Above 5 %, buying tends to win. Prague today is around 4 %; Brno 5–6 %; smaller cities 6–7 %.
Hidden costs of ownership
Beyond the mortgage payment, owners also pay: property tax (1–4k Kč/year), insurance (5–15k/year), SVJ contributions (2–5k/month), and maintenance (rule of thumb: 1 % of property value annually). For a 5M property that's 50–100k/year on top of the mortgage. Renters pay none of this.
Frequently asked questions
What time horizon makes sense for the comparison?
At least 10 years. Below 5 years, renting almost always wins because you've barely paid down any principal. Above 15 years, buying typically wins. The crossover point depends heavily on local rent-to-price ratios.
How fast do rents grow in Czech Republic?
Long-term, Czech rents grow about 3–5 % per year, slightly above inflation. The post-COVID period (2021–2023) saw 8–12 % spikes in big cities, especially Prague. The default in our calculator is 3 % — a conservative long-term assumption.
What property appreciation is realistic?
Long-term (30+ years), Czech property appreciates 3–4 % per year. Prague and Brno historically 4–6 %. Short-term can also see corrections (2008–2013, parts of 2023). Default in calculator: 3 % — a cautious estimate.
Should I let "rent is wasted money" influence me?
No, it's a myth. Mortgage interest is also "wasted money" in the early years — you pay mostly interest then. The real difference is that, long-term (15+ years), ownership builds equity. But until then the gap is smaller than people assume.
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