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

620.000 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 years2,2 Mio. Kč

Rent: after 10 years1,3 Mio. Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 943.582 Kč more than if you rented.

A month in the first year

Buying
14.623 Kča month
Renting
12.500 Kča month
Buying
Mortgage: 13.222 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.292 Kč · Tax relief: −1.521 Kč
Cash on day one
637.000 Kč
Mortgage: 2.480.000 Kč

What you'd have after 10 years

If you buy
2.202.404 Kč
If you rent
1.258.822 Kč
Break-even
Year 2
Homes for sale in SvitavyHomes to rent in Svitavy

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
13.193.000 Kč2.443.017 Kč175.476 Kč150.000 Kč668.801 Kč703.360 Kč
23.288.790 Kč2.404.166 Kč176.800 Kč154.500 Kč815.768 Kč769.143 Kč
33.387.454 Kč2.363.351 Kč178.175 Kč159.132 Kč968.097 Kč834.238 Kč
43.489.077 Kč2.320.475 Kč179.600 Kč163.908 Kč1.125.985 Kč898.514 Kč
53.593.750 Kč2.275.432 Kč181.077 Kč168.828 Kč1.289.645 Kč961.839 Kč
63.701.562 Kč2.228.111 Kč182.595 Kč173.892 Kč1.459.293 Kč1.024.062 Kč
73.812.609 Kč2.178.399 Kč184.177 Kč179.112 Kč1.635.156 Kč1.085.038 Kč
83.926.987 Kč2.126.177 Kč185.814 Kč184.476 Kč1.817.461 Kč1.144.616 Kč
94.044.797 Kč2.071.313 Kč187.506 Kč190.020 Kč2.006.461 Kč1.202.607 Kč
104.166.141 Kč2.013.679 Kč189.241 Kč195.720 Kč2.202.404 Kč1.258.822 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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