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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.

A typical 55 m² two-room flat in Jablonec nad Nisou, at the area's median asking price and rent per m² today. See Jablonec nad Nisou's market

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

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

Worked out for 55 m²: repair fund, administration, insurance and property tax.

Over the years

Buy: after 10 years3 Mio. Kč

Rent: after 10 years2,1 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 845.259 Kč more than if you rented.

A month in the first year

Buying
19.513 Kča month
Renting
13.800 Kča month
Buying
Mortgage: 18.000 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.758 Kč · Tax relief: −1.875 Kč
Cash on day one
861.000 Kč
Mortgage: 3.376.000 Kč

What you'd have after 10 years

If you buy
2.951.767 Kč
If you rent
2.106.508 Kč
Break-even
Year 3
Homes for sale in Jablonec nad NisouHomes to rent in Jablonec nad Nisou

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
14.346.600 Kč3.325.644 Kč234.156 Kč165.600 Kč905.470 Kč980.566 Kč
24.476.998 Kč3.272.744 Kč235.380 Kč170.568 Kč1.100.676 Kč1.101.414 Kč
34.611.308 Kč3.217.172 Kč236.628 Kč175.680 Kč1.303.305 Kč1.223.483 Kč
44.749.647 Kč3.158.789 Kč237.924 Kč180.960 Kč1.513.655 Kč1.346.711 Kč
54.892.137 Kč3.097.457 Kč239.256 Kč186.384 Kč1.732.033 Kč1.471.042 Kč
65.038.901 Kč3.033.025 Kč240.624 Kč191.976 Kč1.958.761 Kč1.596.398 Kč
75.190.068 Kč2.965.338 Kč242.305 Kč197.736 Kč2.193.921 Kč1.722.719 Kč
85.345.770 Kč2.894.229 Kč244.270 Kč203.664 Kč2.437.596 Kč1.849.907 Kč
95.506.143 Kč2.819.527 Kč246.309 Kč209.772 Kč2.690.101 Kč1.977.875 Kč
105.671.327 Kč2.741.051 Kč248.411 Kč216.072 Kč2.951.767 Kč2.106.508 Kč

Thinking of letting it instead? Work out its cash flow

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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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