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Rent vs Buy Calculator

Compare renting with buying the same home: what you’d have after you sell, including land transfer tax, property tax and what your down payment could earn if you invested it.

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A month

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Years before you’d sell or move

More options· Growth, investment return and the costs of owning
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Growth a year

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Growth a year

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Return a year

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% of value a year

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% of value a year

Years

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A year

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A month: condo, strata or service charges

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Taxes and fees, % of price

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Agent and legal fees, % of value

Buying leaves you better off by

$6,970

After 7 years, once the home is sold and costs are paid

Buying pays off after
7 years
Owning, first month
$4,377/mo

What this means

Compare rent with the costs of owning you don’t get back, not the whole mortgage payment. In the first year those come to about $3,310 a month (mortgage interest, property tax, repairs and insurance), against rent of $2,600 a month.

Buying comes out ahead from year 7. Until then, the $13,000 it costs to buy, and the costs of selling, haven’t been earned back. You plan to stay long enough.

Next step

What you’d have, year by year

YearBuyingRenting
1$67,332$103,866
2$100,068$130,487
3$134,002$157,885
4$169,181$186,081
5$205,651$215,100
6$243,462$244,963
7$282,666$275,696

How it’s compared

  • Buying: what the home is worth when you sell, minus the mortgage left and the costs of selling.
  • Renting: the down payment and buying costs you’d have invested instead, growing at 5% a year.
  • Each month, whichever costs less invests the difference, so both spend the same.
Assumptions in this estimate
  • Rates, growth and returns stay the same every year. Mortgage insurance, tax breaks on home sales and tax on investment returns aren’t included: use an after-tax return for the investments.
  • Insurance and other owner costs rise with rent each year.
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How the calculator works

The calculator follows two people from the same starting point:

  • The buyer pays the down payment and costs to buy, such as land transfer tax and legal fees, then the mortgage, property tax, insurance and repairs. When they sell, they keep the home’s value minus the mortgage left and the costs of selling.
  • The renter invests the down payment and costs to buy instead, and pays rent.

Each month, whoever pays less invests the difference, so both spend the same. The result is who has more after the years you choose.

Example

A $650,000 home with $65,000 down, at 4.5% over 25 years, against rent of $2,600 a month:

Amount
Owning, first month $4,377
Mortgage payment $3,252
After 7 years Buying ahead by about $7,000
Buying pays off after 7 years

It’s close: if your investments would earn 7% a year instead of 5%, renting comes out ahead by about $21,000.

What matters most

  • How long you stay: land transfer tax and realtor fees take years to earn back.
  • Your mortgage rate at renewal: most Canadian mortgages renew every few years, so the rate can change.
  • Home price growth: small changes make a big difference over time.

Work out the tax to buy with the land transfer tax calculator, or read is renting dead money?

Last updated

Frequently asked questions

Is it cheaper to rent or buy in Canada?

It depends most on how long you stay, how fast home prices grow, and your mortgage rate. Land transfer tax and realtor fees make buying and selling expensive, so the longer you stay, the more likely buying comes out ahead.

Isn’t rent just throwing money away?

Owning has costs you don’t get back too: mortgage interest, property tax, insurance and repairs. Only the part of the payment that pays off the loan builds wealth. If those costs are more than rent and you invest the difference, renting can leave you better off.

Does it include mortgage default insurance?

No. With less than 20% down you pay a CMHC or similar premium of 2.8% to 4% of the loan, which makes buying cost more. Enter it under costs to buy if you’re paying it up front.

What about tax on the gains?

Your home is usually free of tax when you sell, thanks to the principal residence exemption. Investments in a TFSA or FHSA can grow tax-free too; outside them, enter an after-tax return.