Rent vs Buy
Calculator
Compare the real total cost of renting versus buying in Canada — including mortgage interest, property tax, maintenance, opportunity cost, and home appreciation.
Results are estimates for informational purposes only — not financial advice. Always consult a licensed professional before making decisions. Terms of use →
Frequently asked questions
Common questions about renting vs buying in Canada.
What is opportunity cost and why does it matter?
Opportunity cost is what you give up by putting money into a down payment instead of investing it. If you put $130,000 into a home down payment, that money can't grow in the stock market. This calculator assumes you'd invest that money at your chosen rate of return if you rented instead — which is a real financial advantage of renting that most people overlook.
How is the "net cost of buying" calculated?
Net cost of buying = all mortgage interest paid + property tax + maintenance + closing costs − equity built − home appreciation gained + selling costs (~4%). We subtract equity and appreciation because they're real financial gains you keep when you eventually sell.
How is the "net cost of renting" calculated?
Net cost of renting = total rent paid + renters insurance − investment gains on down payment (opportunity cost). We subtract what your down payment would have earned if invested, because renting lets you keep that capital deployed.
What is the break-even year?
The break-even year is when buying becomes cheaper than renting on a cumulative basis. Before this year, the total cost of renting is lower. After this year, the total cost of buying is lower. Buying becomes more advantageous the longer you stay in the home.
Is renting always "throwing money away"?
No — this is a common myth. Renters can invest their down payment and capture investment returns that can rival home appreciation. Buying also has significant hidden costs: mortgage interest (especially in early years), property tax, maintenance, and selling costs typically 3–5% of the sale price. The right answer depends on your timeline, local market, and personal financial situation.
What home appreciation rate should I use for Canada?
Canadian home prices have historically appreciated at about 5–7% annually in major cities (Toronto, Vancouver) and 2–4% in smaller markets over the long term. However, past performance doesn't guarantee future results. Use 3–4% for a conservative estimate or 5–6% if you're in a high-demand urban area.
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The rent vs buy decision in Canada
The real costs most people overlook on both sides of the equation.
Most people compare rent vs mortgage payment — but buying has hidden costs: property tax (1–2% of home value/yr), maintenance (1–2%/yr), insurance, land transfer tax on purchase, and selling costs (3–5%) when you eventually move. These can add $20,000+ per year on a $700K home.
A $130,000 down payment invested in a diversified portfolio at 6–7%/year grows to $248,000 in 10 years. This is the opportunity cost of homeownership. Renting lets you keep that capital working for you — and is why renting isn't always "throwing money away."
In most Canadian cities, buying becomes cheaper than renting after 7–12 years when all costs are accounted for. If you plan to move within 5 years, renting is almost always the better financial decision due to transaction costs and limited time to build equity.
Canadian home prices appreciated ~5–7%/yr in major cities over the past 20 years — but that was exceptional. Most financial models use 2–4% for conservative projections. Don't assume past appreciation rates will continue — especially in markets like Toronto and Vancouver that are already highly valued.
Canadian asking rents fell to a 35-month low of $2,008/mo nationally in March 2026 — down 5.3% year-over-year, the largest annual decline in five years. Vancouver and Toronto rents are down 13% from their 2022 peaks. This shifts the rent vs buy equation in favour of renting in 2026.
The best decision isn't always the mathematically optimal one. Stability, the ability to renovate, pets, school districts, and the feeling of "home" all matter. Some Canadians are willing to pay a financial premium to own — and that's a valid, personal choice beyond the numbers.