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

896.000 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 years3,1 Mio. Kč

Rent: after 10 years2,3 Mio. Kč

The result

Buying comes out ahead from year 3. After 10 years you'd have 777.974 Kč more than if you rented.

A month in the first year

Buying
20.730 Kča month
Renting
13.900 Kča month
Buying
Mortgage: 19.108 Kč · Owner's costs: 1.630 Kč · Upkeep: 1.867 Kč · Tax relief: −1.875 Kč
Cash on day one
913.000 Kč
Mortgage: 3.584.000 Kč

What you'd have after 10 years

If you buy
3.111.998 Kč
If you rent
2.334.024 Kč
Break-even
Year 3
Homes for sale in Zlínský krajHomes to rent in Zlínský kraj

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
14.614.400 Kč3.530.554 Kč248.760 Kč166.800 Kč959.209 Kč1.047.177 Kč
24.752.832 Kč3.474.406 Kč250.020 Kč171.804 Kč1.164.295 Kč1.183.220 Kč
34.895.417 Kč3.415.420 Kč251.304 Kč176.964 Kč1.377.156 Kč1.321.082 Kč
45.042.279 Kč3.353.454 Kč252.648 Kč182.268 Kč1.598.100 Kč1.460.756 Kč
55.193.548 Kč3.288.357 Kč254.016 Kč187.740 Kč1.827.452 Kč1.602.180 Kč
65.349.354 Kč3.219.971 Kč255.432 Kč193.368 Kč2.065.544 Kč1.745.323 Kč
75.509.835 Kč3.148.129 Kč256.896 Kč199.164 Kč2.312.733 Kč1.890.143 Kč
85.675.130 Kč3.072.656 Kč258.396 Kč205.140 Kč2.569.382 Kč2.036.571 Kč
95.845.384 Kč2.993.371 Kč259.956 Kč211.296 Kč2.835.869 Kč2.184.559 Kč
106.020.745 Kč2.910.079 Kč262.139 Kč217.632 Kč3.111.998 Kč2.334.024 Kč

Thinking of letting it instead? Work out its cash flow

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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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