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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 Kladno, at the area's median asking price and rent per m² today. See Kladno'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

1.122.000 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 years3,9 Mio. Kč

Rent: after 10 years2,5 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.413.699 Kč more than if you rented.

A month in the first year

Buying
26.021 Kča month
Renting
20.000 Kča month
Buying
Mortgage: 23.928 Kč · Owner's costs: 1.630 Kč · Upkeep: 2.338 Kč · Tax relief: −1.875 Kč
Cash on day one
1.139.000 Kč
Mortgage: 4.488.000 Kč

What you'd have after 10 years

If you buy
3.870.562 Kč
If you rent
2.456.863 Kč
Break-even
Year 2
Homes for sale in KladnoHomes to rent in Kladno

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
15.778.300 Kč4.421.070 Kč312.252 Kč240.000 Kč1.198.485 Kč1.273.141 Kč
25.951.649 Kč4.350.756 Kč313.680 Kč247.200 Kč1.452.617 Kč1.407.251 Kč
36.130.198 Kč4.276.890 Kč315.144 Kč254.616 Kč1.716.467 Kč1.541.162 Kč
46.314.104 Kč4.199.290 Kč316.656 Kč262.260 Kč1.990.431 Kč1.674.696 Kč
56.503.528 Kč4.117.769 Kč318.216 Kč270.120 Kč2.274.911 Kč1.807.682 Kč
66.698.633 Kč4.032.129 Kč319.824 Kč278.220 Kč2.570.332 Kč1.939.918 Kč
76.899.592 Kč3.942.161 Kč321.480 Kč286.572 Kč2.877.137 Kč2.071.184 Kč
87.106.580 Kč3.847.648 Kč323.184 Kč295.164 Kč3.195.787 Kč2.201.261 Kč
97.319.778 Kč3.748.358 Kč324.948 Kč304.020 Kč3.526.762 Kč2.329.911 Kč
107.539.371 Kč3.644.051 Kč326.748 Kč313.140 Kč3.870.562 Kč2.456.863 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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