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

458.000 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 years1,7 Mio. Kč

Rent: after 10 years730.633 Kč

The result

Buying comes out ahead from year 2. After 10 years you'd have 996.977 Kč more than if you rented.

A month in the first year

Buying
11.228 Kča month
Renting
11.500 Kča month
Buying
Mortgage: 9.768 Kč · Owner's costs: 1.630 Kč · Upkeep: 954 Kč · Tax relief: −1.124 Kč
Cash on day one
475.000 Kč
Mortgage: 1.832.000 Kč

What you'd have after 10 years

If you buy
1.727.610 Kč
If you rent
730.633 Kč
Break-even
Year 2
Homes for sale in TepliceHomes to rent in Teplice

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
12.358.700 Kč1.804.672 Kč134.741 Kč138.000 Kč495.898 Kč503.558 Kč
22.429.461 Kč1.775.962 Kč135.884 Kč142.140 Kč606.442 Kč530.263 Kč
32.502.345 Kč1.745.802 Kč137.050 Kč146.400 Kč721.082 Kč554.940 Kč
42.577.415 Kč1.714.119 Kč138.274 Kč150.792 Kč839.972 Kč577.430 Kč
52.654.738 Kč1.680.833 Kč139.522 Kč155.316 Kč966.273 Kč600.527 Kč
62.734.380 Kč1.645.864 Kč140.819 Kč159.984 Kč1.100.665 Kč624.548 Kč
72.816.411 Kč1.609.128 Kč142.164 Kč164.784 Kč1.243.550 Kč649.530 Kč
82.900.903 Kč1.570.536 Kč143.558 Kč169.728 Kč1.395.361 Kč675.511 Kč
92.987.931 Kč1.529.995 Kč145.003 Kč174.816 Kč1.556.546 Kč702.531 Kč
103.077.569 Kč1.487.404 Kč146.474 Kč180.060 Kč1.727.610 Kč730.633 Kč

Thinking of letting it instead? Work out its cash flow

Reader poll

Do you own the home you live in?

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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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