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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 Ústí nad Labem-město, at the area's median asking price and rent per m² today. See Ústí nad Labem-město'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

726.000 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 years2,5 Mio. Kč

Rent: after 10 years1,9 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 599.731 Kč more than if you rented.

A month in the first year

Buying
16.845 Kča month
Renting
11.300 Kča month
Buying
Mortgage: 15.483 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.513 Kč · Tax relief: −1.781 Kč
Cash on day one
743.000 Kč
Mortgage: 2.904.000 Kč

What you'd have after 10 years

If you buy
2.537.306 Kč
If you rent
1.937.575 Kč
Break-even
Year 3
Homes for sale in Ústí nad Labem-městoHomes to rent in Ústí nad Labem-město

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
13.738.900 Kč2.860.691 Kč202.139 Kč135.600 Kč780.089 Kč854.906 Kč
23.851.067 Kč2.815.193 Kč203.595 Kč139.668 Kč948.915 Kč968.540 Kč
33.966.599 Kč2.767.395 Kč205.104 Kč143.856 Kč1.123.793 Kč1.083.893 Kč
44.085.597 Kč2.717.182 Kč206.667 Kč148.176 Kč1.304.945 Kč1.200.942 Kč
54.208.165 Kč2.664.431 Kč208.271 Kč152.616 Kč1.492.607 Kč1.319.667 Kč
64.334.410 Kč2.609.016 Kč209.943 Kč157.200 Kč1.687.017 Kč1.440.045 Kč
74.464.442 Kč2.550.799 Kč211.683 Kč161.916 Kč1.888.426 Kč1.562.063 Kč
84.598.375 Kč2.489.638 Kč213.469 Kč166.776 Kč2.097.097 Kč1.685.675 Kč
94.736.327 Kč2.425.387 Kč215.336 Kč171.780 Kč2.313.296 Kč1.810.866 Kč
104.878.416 Kč2.357.889 Kč217.239 Kč176.928 Kč2.537.306 Kč1.937.575 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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