$
$
$
A month
%
Years before you’d sell or move
More options· Growth, investment return and the costs of owning
%
Growth a year
%
Growth a year
%
Return a year
%
% of value a year
%
% of value a year
Years
$
A year
$
A month: condo, strata or service charges
%
Taxes and fees, % of price
%
Agent and legal fees, % of value
Renting leaves you better off by
$31,895
After 7 years, once the home is sold and costs are paid
- Buying pays off after
- 15 years
- Owning, first month
- $3,031/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 $2,782 a month (mortgage interest, property tax, repairs and insurance), against rent of $2,200 a month.
Buying comes out ahead from year 15. Until then, the $12,000 it costs to buy, and the costs of selling, haven’t been earned back. If you’d move sooner, renting is likely to cost less.
What you’d have, year by year
| Year | Buying | Renting |
|---|---|---|
| 1 | $70,383 | $106,912 |
| 2 | $85,337 | $122,077 |
| 3 | $100,889 | $137,491 |
| 4 | $117,068 | $153,153 |
| 5 | $133,906 | $169,058 |
| 6 | $151,435 | $185,203 |
| 7 | $169,689 | $201,583 |
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.