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

452.000 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 years1,6 Mio. Kč

Rent: after 10 years933.016 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 671.957 Kč more than if you rented.

A month in the first year

Buying
11.103 Kča month
Renting
9.500 Kča month
Buying
Mortgage: 9.640 Kč · Owner's costs: 1.630 Kč · Upkeep: 942 Kč · Tax relief: −1.109 Kč
Cash on day one
469.000 Kč
Mortgage: 1.808.000 Kč

What you'd have after 10 years

If you buy
1.604.973 Kč
If you rent
933.016 Kč
Break-even
Year 2
Homes for sale in DěčínHomes to rent in Děčín

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
12.327.800 Kč1.781.031 Kč133.237 Kč114.000 Kč487.530 Kč518.184 Kč
22.397.634 Kč1.752.698 Kč134.366 Kč117.420 Kč594.624 Kč567.003 Kč
32.469.563 Kč1.722.933 Kč135.529 Kč120.948 Kč705.622 Kč615.362 Kč
42.543.650 Kč1.691.665 Kč136.738 Kč124.572 Kč820.671 Kč663.187 Kč
52.619.959 Kč1.658.816 Kč137.983 Kč128.304 Kč939.922 Kč710.379 Kč
62.698.558 Kč1.624.308 Kč139.276 Kč132.156 Kč1.063.535 Kč756.834 Kč
72.779.515 Kč1.588.055 Kč140.606 Kč136.116 Kč1.191.673 Kč802.443 Kč
82.862.900 Kč1.549.970 Kč141.985 Kč140.208 Kč1.324.506 Kč847.082 Kč
92.948.787 Kč1.509.961 Kč143.425 Kč144.408 Kč1.462.211 Kč890.659 Kč
103.037.251 Kč1.467.931 Kč144.892 Kč148.740 Kč1.604.973 Kč933.016 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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