Rent vs Buy Calculator (Canada)
Find out whether you end up with more money by buying a home or by renting and investing the difference. Enter your city, price, rent and how long you plan to stay. You get the answer, the rent at which it flips, and the price growth buying needs.
Where the lines cross is the year buying pulls ahead.
| Month one | Owning | Renting |
|---|---|---|
| Cash out each month | $4,064.77 | $2,625.00 |
| Of that, gone for good (interest, tax, upkeep, fees, or rent) | $2,963.96 | $2,625.00 |
| Cash needed up front (20% down, land transfer tax, legal) | $151,975 | invested instead |
| When you sell in year 10: commission and legal | − $47,037 | — |
| Net worth after 10 years | $493,274 | $483,684 |
If you stay longer or shorter, or prices grow differently
| Stay | Prices 0%/yr | Prices 2%/yr | Prices 3%/yr | Prices 4%/yr | Prices 5%/yr |
|---|---|---|---|---|---|
| 5 yrs | Rent +$116,933 | Rent +$50,296 | Rent +$14,918 | Buy +$21,887 | Buy +$60,162 |
| 10 yrs | Rent +$198,683 | Rent +$66,326 | Buy +$9,591 | Buy +$92,722 | Buy +$183,660 |
| 15 yrs | Rent +$295,850 | Rent +$101,444 | Buy +$19,541 | Buy +$159,371 | Buy +$320,641 |
| 20 yrs | Rent +$413,460 | Rent +$164,610 | Buy +$4,613 | Buy +$211,858 | Buy +$464,664 |
| 25 yrs | Rent +$558,473 | Rent +$268,333 | Rent +$50,133 | Buy +$234,706 | Buy +$603,777 |
Year by year
| Year | Owner cost | Rent | Home value | Mortgage left | Owner net | Renter net |
|---|---|---|---|---|---|---|
| 1 | $48,777 | $31,500 | $721,000 | $546,790 | $138,160 | $178,371 |
| 2 | $49,134 | $32,155 | $742,630 | $533,035 | $172,464 | $206,052 |
| 3 | $49,502 | $32,824 | $764,909 | $518,711 | $207,953 | $235,093 |
| 4 | $49,881 | $33,507 | $787,856 | $503,795 | $244,668 | $265,572 |
| 5 | $50,271 | $34,205 | $811,492 | $488,263 | $282,654 | $297,572 |
| 6 | $50,673 | $34,917 | $835,837 | $472,090 | $321,955 | $331,183 |
| 7 | $51,086 | $35,643 | $860,912 | $455,247 | $362,619 | $366,497 |
| 8 | $51,513 | $36,386 | $886,739 | $437,710 | $404,693 | $403,614 |
| 9 | $51,952 | $37,143 | $913,341 | $419,447 | $448,227 | $442,639 |
| 10 | $52,404 | $37,917 | $940,741 | $400,430 | $493,274 | $483,684 |
Show the math
Owner: mortgage on $560,000 at 4.09% over 25 years. Property tax 0.7% and maintenance 1% of the growing value, plus condo fees and insurance. Land transfer tax $10,475 and legal fees up front. 5% selling costs at the end. Renter: pays rent rising 2.1% a year, invests the owner's up-front cash and, each year, whatever owning would have cost more than renting, at 6% tax-free. Net worth compares home equity after selling costs with the renter's portfolio. Not modelled: capital gains tax on the renter's portfolio at the end (the home is tax-free as a principal residence), utilities differences, and the value of stability or flexibility.
How this calculator works
Buyer. Pays the down payment, land transfer tax and any sales tax on the CMHC premium up front. Each year they pay the mortgage (semi-annual compounding, CMHC premium in the loan), property tax, maintenance, insurance and condo fees. The home grows at the rate you set. Their net worth at the end is the home’s value, minus selling costs and the mortgage still owing.
Renter. Keeps the same up-front cash and invests it. Each year they pay rent, which rises at your rent-growth rate, and invest whatever owning would have cost more than renting. If rent ever costs more than owning, they draw the difference from their investments. Their net worth is the investment account.
The calculator compares the two net-worth figures at your horizon and reports the first year buying is ahead.
Worked example: $700,000 home, 10% down, 4.5%, $2,600 rent, 10 years, Ontario
| Line | Amount |
|---|---|
| Cash the buyer needs up front | $83,537 (incl. $10,475 land transfer tax) |
| CMHC premium added to the mortgage | $19,530 |
| Owner’s monthly cost, year 1 | $4,686.64 |
| Rent, year 1 | $2,600.00 |
| Home value after 10 years | $940,741 |
| Buyer’s net worth (after 5% selling costs) | $422,460 |
| Renter’s net worth (invested savings at 5%) | $418,769 |
| Result | Buying by $3,691 |
Assumptions
- Constant growth rates for prices, rent and investments. Real markets are lumpy.
- Land transfer tax uses the provincial base rate (add Toronto or Montreal in the land transfer tool for city rates). The mortgage rate is constant for the whole horizon.
- Renter’s investment gains untaxed. Owner’s gains exempt as a principal residence.
- Maintenance as a flat percentage. New homes need less, old homes more.
By city
CalgaryEdmontonHalifaxHamiltonKitchener-WaterlooLondonMontrealOttawaQuebec CityReginaSaskatoonTorontoVancouverVictoriaWinnipeg
If you decide to buy: what to line up first
Three programs change the down payment math and all need paperwork before closing.
Common questions
Frequently asked questions
- Is it better to rent or buy in Canada right now?
- It depends on the price-to-rent ratio where you live, how long you stay, and what the renter does with the savings. In expensive cities where a home costs 25 to 30 times the annual rent, renting and investing often wins over 5 to 10 years. In cities where the ratio is under 20, buying usually wins.
- What costs of owning do people forget?
- Property tax (0.5% to 1.2% of value a year), maintenance (about 1% of value a year on average, lumpy), insurance, condo fees, the CMHC premium, land transfer tax at purchase and 4% to 6% of the price in commissions and legal fees at sale. The mortgage payment is usually only two-thirds of the true cost of owning.
- Why does the renter need to invest to come out ahead?
- The renter's advantage is the down payment, closing costs and any monthly saving that the buyer sinks into the house. If that money is spent rather than invested, renting loses almost every comparison. The calculator invests all of it at the return you enter, which is what most bank calculators leave out and is often the deciding factor.
- Are the gains taxed?
- A principal residence is exempt from capital gains tax, which the calculator reflects. The renter's investment gains are treated as tax-free, as if held in a TFSA. In a taxable account the renter's result would be lower, which favours buying slightly.
- What growth rates should I assume?
- Over long periods Canadian house prices have grown a little faster than inflation, but the last 25 years were unusual. Try 2% to 3% for home prices, 5% to 6% for a balanced portfolio, and 2% to 3% for rent, then test what happens if prices are flat for a decade.
- What is the 5% rule for rent vs buy?
- A rule of thumb that owning costs about 5% of the home's value a year in unrecoverable costs (property tax, maintenance and the cost of the capital tied up), so if annual rent is less than 5% of the price, renting is cheaper. The calculator's break-even rent is the precise version of that number for your inputs.
- How long do I need to stay for buying to pay off?
- Usually 5 to 8 years in most Canadian cities. Land transfer tax, CMHC at purchase, legal fees and the 4% to 5% commission when you sell are large fixed costs that can equal several years of the difference between owning and renting. Under about five years, buying rarely wins unless prices jump. The result shows the first year the owner is ahead.
- How much can my rent go up each year?
- In Ontario the 2026 guideline for rent-controlled units is 2.1%, and in British Columbia 2.3%. Units first occupied after November 2018 in Ontario are exempt. Other provinces have no cap and market increases apply. The calculator uses the guideline by default and lets you override it.
What changed in 2025 and 2026
- Foreign Buyer Rules in Canada to 2027The federal foreign buyer ban runs to January 1, 2027. Ontario's 25% tax, Toronto's 10%, BC's 20% and Nova Scotia's 10% apply either way. Who is exempt.
- The Underused Housing Tax Has EndedNo UHT return or payment is needed for 2025 and later years. Returns for 2022 to 2024 are still owed, with penalties. Who was affected and what to do now.
Sources
Sources
Every figure on this page comes from one of these primary sources. Data last verified .
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