Rent vs Buy Calculator Canada

Direct answer: Renting is usually better when you need flexibility, expect a short stay, or the ownership premium is too high. Buying is usually stronger when you can stay long enough for equity, principal paydown and housing stability to outweigh land transfer tax, legal fees, maintenance, property tax, mortgage interest and the investment return you give up by using a down payment.

Primary sources: FCAC: Buying a home; CMHC: Home-buying resources.

Use the Mortgage Calculator to test the buying side, then compare it with rent, expected investment return, maintenance, closing costs and your time horizon.

Rent-vs-buy formula

Primary sources: FCAC: Buying a home; Interest Act, section 6.

buying cost = mortgage interest + property tax + maintenance + insurance + condo fees + closing costs - principal paid - estimated appreciation

renting cost = rent + renter insurance - investment growth on cash not used for down payment or closing costs

The hard part is not the formula; it is choosing honest assumptions. A small change in home-price growth, rent growth or investment return can flip the answer.

Worked Canadian example

This example compares a $700,000 purchase with 20% down, a 5.00% mortgage rate, 25-year amortization, $600 monthly property tax, $250 monthly maintenance and $2,800 monthly rent.

Item	Buying	Renting
Monthly shelter cash outflow	About $4,104 before utilities and insurance	$2,800 rent before renter insurance
Up-front cash	$140,000 down payment plus closing costs	Usually first month, deposit rules and moving costs
Equity after 5 years	About $61,000 principal repaid before price changes	$0 home equity, but down-payment cash may remain invested
Main swing factor	Home appreciation and length of stay	Investment return and rent growth

Break-even questions

Question	Why it matters
How long will you stay?	Short stays make one-time costs harder to recover.
How much cash must leave investments?	The down payment and closing costs have an opportunity cost.
Is the comparison similar quality?	A detached home and a smaller rental apartment are not the same housing consumption.
Can you handle repairs?	Owners absorb maintenance shocks; renters usually do not.

• Buying usually improves with a longer holding period, stable income, manageable repairs and realistic appreciation.
• Renting usually improves when you invest the unused down payment, may move soon, or would be house-poor after purchase.

Costs people often miss

Primary sources: FCAC: Buying a home.

• Land transfer tax: province-specific and sometimes municipal.
• Maintenance: not every year is expensive, but the long-run budget must include repairs.
• Condo fees and special assessments: material for apartments and townhouses.
• Transaction costs: legal fees, inspection, appraisal, moving, title insurance and selling costs if you leave.

Common mistakes

• Counting the whole mortgage payment as a cost: interest is a cost, but principal repayment builds equity.
• Ignoring opportunity cost: a down payment invested elsewhere may grow.
• Assuming appreciation is guaranteed: home prices can fall or underperform investments.

Methodology and assumptions

The example uses usecos mortgage math with Canadian semi-annual compounding, a fixed-rate mortgage, no CMHC premium, and simplified monthly ownership costs. It excludes income tax, selling commission, home-price volatility, rent-control rules, investment fees and personal tax treatment. Verified July 29, 2026.

Sources: FCAC buying a home; CMHC renting or buying resources; Statistics Canada shelter-cost definition; Interest Act, section 6.