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