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

490.000 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 years1,9 Mio. Kč

Rent: after 10 years764.778 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 1.120.125 Kč more than if you rented.

A month in the first year

Buying
11.899 Kča month
Renting
12.500 Kča month
Buying
Mortgage: 10.450 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.021 Kč · Tax relief: −1.202 Kč
Cash on day one
507.000 Kč
Mortgage: 1.960.000 Kč

What you'd have after 10 years

If you buy
1.884.903 Kč
If you rent
764.778 Kč
Break-even
Year 2
Homes for sale in Most IIHomes to rent in Most II

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
12.523.500 Kč1.930.768 Kč142.787 Kč150.000 Kč530.851 Kč534.022 Kč
22.599.205 Kč1.900.058 Kč143.956 Kč154.500 Kč649.447 Kč558.805 Kč
32.677.181 Kč1.867.795 Kč145.173 Kč159.132 Kč772.448 Kč581.168 Kč
42.757.497 Kč1.833.903 Kč146.426 Kč163.908 Kč903.531 Kč604.415 Kč
52.840.221 Kč1.798.300 Kč147.726 Kč168.828 Kč1.043.124 Kč628.592 Kč
62.925.428 Kč1.760.896 Kč149.065 Kč173.892 Kč1.191.674 Kč653.735 Kč
73.013.191 Kč1.721.603 Kč150.464 Kč179.112 Kč1.349.628 Kč679.885 Kč
83.103.587 Kč1.680.324 Kč151.890 Kč184.476 Kč1.517.477 Kč707.080 Kč
93.196.694 Kč1.636.958 Kč153.391 Kč190.020 Kč1.695.722 Kč735.363 Kč
103.292.595 Kč1.591.402 Kč154.919 Kč195.720 Kč1.884.903 Kč764.778 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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