Rent vs buy over your horizon
Comparing net cost of owning vs renting over your timeline — including down payment, closing, equity build, and the opportunity cost of capital you'd otherwise invest.
Your scenario
Result
Comparison assumes 25-year amortization, 2%/yr ownership upkeep, 6% selling costs, 5% opportunity-cost return on invested capital.
How rent vs buy math actually works
Owning a home isn't just mortgage payment versus rent. Owners pay property tax, maintenance, insurance, condo fees, and major capex (roof, HVAC, windows) — but build equity and benefit from any appreciation. Renters skip those costs but lose the equity build AND face inflation-adjusted rent increases.
The crossover horizon
For most Canadian markets at today's rates, buying breaks even with renting somewhere between 5 and 8 years of ownership. Inside that window renting often wins — especially if you'd invest the down payment into a TFSA or RRSP at a meaningful expected return.
What flips the answer
- Higher appreciation expectations — favours buying
- Higher rent inflation — favours buying
- Longer holding period — favours buying (selling costs amortize over more years)
- Higher mortgage rate — favours renting (interest cost overwhelms equity build early on)
- Higher expected investment returns — favours renting (opportunity cost of capital is larger)
Hidden costs of ownership most people miss
- Property tax (0.3% to 1.3% of value annually depending on city)
- Maintenance reserve (1-2% of value per year, lumpy in practice)
- Condo fees on apartments + townhomes ($300-$1,000/mo)
- Insurance ($90-$200/mo)
- Replacement reserves — roof every 25 years, HVAC every 15, etc.
- Selling costs at exit (5-7% of price)
Related calculators + reading
- Mortgage affordability — what you qualify for
- Closing costs — your real upfront bill
- Down payment + CMHC
- Property tax estimator
Questions about this calculator
- Is it cheaper to rent or buy in Canada?
- It depends far more on how long you stay than on the monthly comparison. Buying carries large one-time costs at both ends — land transfer tax on the way in, real estate commission on the way out — and they are only amortised away by time. Under about five years, renting often wins.
- What costs do people forget when comparing?
- On the buying side: property tax, home insurance, maintenance, condo fees and closing costs. On the renting side: the return on the down payment that stays invested instead. Leaving out that opportunity cost is the most common error, and it flatters buying.
- Does building equity make buying automatically better?
- No. Only the principal portion of the payment builds equity, and early in an amortization that portion is small — most of your payment is interest, which is as gone as rent. Equity accumulates meaningfully in the second half of the amortization.
- What appreciation rate should I assume?
- Long-run Canadian house prices have tracked somewhat above inflation, but any single decade can deviate hugely and any single city more so. Run the comparison at a conservative rate and at zero. If buying only wins on an optimistic assumption, that is worth knowing.