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

838.000 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 years2,9 Mio. Kč

Rent: after 10 years2 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 954.630 Kč more than if you rented.

A month in the first year

Buying
19.373 Kča month
Renting
14.400 Kča month
Buying
Mortgage: 17.872 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.746 Kč · Tax relief: −1.875 Kč
Cash on day one
855.000 Kč
Mortgage: 3.352.000 Kč

What you'd have after 10 years

If you buy
2.941.378 Kč
If you rent
1.986.748 Kč
Break-even
Year 2
Homes for sale in Plzeň-severHomes to rent in Plzeň-sever

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
14.315.700 Kč3.302.003 Kč232.476 Kč172.800 Kč899.878 Kč966.024 Kč
24.445.171 Kč3.249.477 Kč233.688 Kč177.984 Kč1.094.600 Kč1.077.775 Kč
34.578.526 Kč3.194.301 Kč234.936 Kč183.324 Kč1.296.745 Kč1.190.172 Kč
44.715.882 Kč3.136.335 Kč236.232 Kč188.820 Kč1.506.616 Kč1.303.137 Kč
54.857.358 Kč3.075.438 Kč237.552 Kč194.484 Kč1.724.521 Kč1.416.560 Kč
65.003.079 Kč3.011.465 Kč238.920 Kč200.328 Kč1.950.786 Kč1.530.336 Kč
75.153.171 Kč2.944.259 Kč240.747 Kč206.328 Kč2.185.332 Kč1.644.377 Kč
85.307.767 Kč2.873.657 Kč242.697 Kč212.520 Kč2.428.398 Kč1.758.537 Kč
95.467.000 Kč2.799.487 Kč244.744 Kč218.892 Kč2.680.301 Kč1.872.720 Kč
105.631.010 Kč2.721.567 Kč246.830 Kč225.468 Kč2.941.378 Kč1.986.748 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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