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

1.248.000 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 years4,2 Mio. Kč

Rent: after 10 years3,9 Mio. Kč

The result

Buying comes out ahead from year 6. After 10 years you'd have 318.528 Kč more than if you rented.

A month in the first year

Buying
28.970 Kča month
Renting
14.700 Kča month
Buying
Mortgage: 26.615 Kč · Owner's costs: 1.630 Kč · Upkeep: 2.600 Kč · Tax relief: −1.875 Kč
Cash on day one
1.265.000 Kč
Mortgage: 4.992.000 Kč

What you'd have after 10 years

If you buy
4.174.498 Kč
If you rent
3.855.970 Kč
Break-even
Year 6
Homes for sale in SemilyHomes to rent in Semily

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
16.427.200 Kč4.917.553 Kč347.640 Kč176.400 Kč1.323.186 Kč1.496.722 Kč
26.620.016 Kč4.839.345 Kč349.164 Kč181.692 Kč1.595.349 Kč1.734.190 Kč
36.818.616 Kč4.757.185 Kč350.724 Kč187.140 Kč1.877.675 Kč1.977.522 Kč
47.023.175 Kč4.670.875 Kč352.344 Kč192.756 Kč2.170.565 Kč2.226.851 Kč
57.233.870 Kč4.580.201 Kč354.000 Kč198.540 Kč2.474.442 Kč2.482.295 Kč
67.450.886 Kč4.484.946 Kč355.716 Kč204.492 Kč2.789.736 Kč2.743.996 Kč
77.674.413 Kč4.384.877 Kč357.492 Kč210.636 Kč3.116.907 Kč3.012.082 Kč
87.904.645 Kč4.279.750 Kč359.304 Kč216.948 Kč3.456.425 Kč3.286.684 Kč
98.141.785 Kč4.169.311 Kč361.188 Kč223.464 Kč3.808.784 Kč3.567.940 Kč
108.386.038 Kč4.053.293 Kč363.096 Kč230.160 Kč4.174.498 Kč3.855.970 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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