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

404.000 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 years1,5 Mio. Kč

Rent: after 10 years662.703 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 837.114 Kč more than if you rented.

A month in the first year

Buying
10.097 Kča month
Renting
10.100 Kča month
Buying
Mortgage: 8.616 Kč · Owner's costs: 1.630 Kč · Upkeep: 842 Kč · Tax relief: −991 Kč
Cash on day one
421.000 Kč
Mortgage: 1.616.000 Kč

What you'd have after 10 years

If you buy
1.499.817 Kč
If you rent
662.703 Kč
Break-even
Year 2
Homes for sale in SokolovHomes to rent in Sokolov

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
12.080.600 Kč1.591.898 Kč121.162 Kč121.200 Kč437.190 Kč448.924 Kč
22.143.018 Kč1.566.578 Kč122.233 Kč124.836 Kč534.443 Kč475.396 Kč
32.207.309 Kč1.539.977 Kč123.337 Kč128.580 Kč635.295 Kč500.279 Kč
42.273.528 Kč1.512.033 Kč124.487 Kč132.444 Kč739.875 Kč523.431 Kč
52.341.734 Kč1.482.678 Kč125.658 Kč136.416 Kč848.331 Kč544.694 Kč
62.411.986 Kč1.451.839 Kč126.889 Kč140.508 Kč963.364 Kč566.481 Kč
72.484.345 Kč1.419.442 Kč128.155 Kč144.720 Kč1.085.645 Kč589.141 Kč
82.558.876 Kč1.385.405 Kč129.457 Kč149.064 Kč1.215.563 Kč612.706 Kč
92.635.642 Kč1.349.650 Kč130.818 Kč153.528 Kč1.353.474 Kč637.214 Kč
102.714.711 Kč1.312.089 Kč132.205 Kč158.136 Kč1.499.817 Kč662.703 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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