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
Mortgage agent or broker? Calculators like this one embed on the website you already have, and Mortgage360 campaign landing pages capture the enquiries they start straight into your CRM.
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.