Rent vs buy calculator
Enter the price, down payment and mortgage, what the home costs to own, the rent you would pay instead and the return you could earn. You see which path leaves you better off and when.
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More assumptions: amortization, taxes, upkeep, fees and returns
Is it better to rent or buy in Canada?
It depends on how fast the home rises in value, how fast rent rises, and what your savings could earn. With a $700,000 home, $140,000 down, a 4.5% mortgage, 3% a year of price growth and $2,600 of rent growing 2.5% a year, buying pulls ahead of renting and investing in year 7 and leads by $27,963 after 10 years. If prices rise only 1% a year, renting is ahead after 10 years by $123,626.
Why we built this calculator
Rent-versus-buy comparisons usually go wrong in one of two ways: they treat the mortgage payment as lost money, or they ignore what the down payment would have earned if invested. This one treats both fairly. The renter starts with the down payment and closing costs invested, and each month whichever option costs less puts the difference to work, so both paths spend exactly the same cash.
The answer is a net worth on each side, a chart of how they diverge, and the year buying pulls ahead. For the numbers that feed it, see the mortgage payment calculator, the property tax calculator and, for Ontario tenants, the rent increase calculator. To see what you could borrow, use the mortgage affordability calculator.
It runs in your browser. Nothing you enter is sent anywhere, and there is no sign-up.
When to use it
- Deciding whether to buy now or keep renting
- Testing how much price growth or rent growth you need for buying to win
- Seeing how long you must stay for buying to pay off
- Comparing a bigger and a smaller down payment
Mistakes it helps you avoid
- Treating rent as wasted and ignoring the interest, property tax and upkeep that owners also pay.
- Forgetting that the down payment could have been invested.
- Ignoring closing and selling costs, which make a short stay expensive.
- Assuming a house price rises at the same rate for every year and city.
How the two paths are compared
Both start with the same cash and each month the cheaper option invests the difference.
mortgage rate per month = (1 + annual rate ÷ 2) ^ (2 ÷ 12) − 1 (semi-annual compounding)monthly payment = loan × i ÷ (1 − (1 + i) ^ −months)cost of owning = payment + property tax + upkeep + condo feeseach month: difference = cost of owning − rent; the renter invests it if positive, the owner invests it if negativerenting net worth = investments (down payment and closing costs, plus the monthly differences, growing at the return)buying net worth = home value × (1 − selling costs) − mortgage balance + any investmentsbreak-even = the first year buying net worth is at least renting net worth
The mortgage convention is the Canadian one: the Interest Act requires the rate to be calculated yearly or half-yearly, and fixed-rate mortgages compound semi-annually. The model assumes a steady rate for the whole amortization, steady price and rent growth, and the sale at the end of the horizon. The gain on a principal residence is not taxed if you designate it, per the CRA, so the home value is counted without tax, while the investment return is the after-tax figure you enter. Rent growth is limited in Ontario by the provincial guideline for covered units, which was 2.1% for 2026 and 1.9% for 2027 on the Ontario page; use your own figure.
Worked example: a $700,000 home against $2,600 rent
You could buy a $700,000 home with $140,000 down at 4.5% over 25 years, or rent a similar home for $2,600 a month, rising 2.5% a year. The home rises 3% a year; property tax is 0.9% and upkeep 1% of value; closing costs are $12,000 and selling costs 4.5%; your investments earn 5% after tax.
- Monthly mortgage payment$3,099.45
- Renter starts with the down payment and closing costs invested$152,000
- Buying net worth after 10 years$492,119.18
- Renting net worth after 10 years$464,155.97
- Break-even year, running the model for 25 yearsyear 7
After 10 years buying leaves $492,119.18 against $464,155.97 for renting and investing, so buying is ahead by $27,963.20. Buying pulls ahead in year 7.
With home prices rising only 1% a year, renting and investing is ahead after 10 years by $123,625.66, and buying does not catch up within 25 years. With rent at $3,400 instead, buying is ahead after 10 years by $164,948.77.
What decides the answer
Four things move the result more than anything else: how fast prices rise compared with rent, how long you stay, the return your savings could earn, and the costs of buying and selling. Staying a short time rarely favours buying, because the closing and selling costs are spread over few years. A high rent compared with the price favours buying; a low one favours renting. Change one input at a time and watch the break-even year move.
Terms on this page
- Break-even year
- The first year in which owning leaves you with at least as much net worth as renting and investing.
- Net worth
- What you would have after selling or cashing out, less what you owe.
Common questions
Is renting throwing money away?
No more than owning is. An owner also pays interest, property tax and upkeep that never come back; the calculator counts all of them.
Is the gain on my home taxed?
Not if it is your principal residence and you designate it, according to the CRA. The investments you would hold as a renter are taxed, which is why the return is entered after tax.
Why does a short stay favour renting?
Closing and selling costs are paid once and take years of price growth to recover.
How is the mortgage payment worked out?
With the rate compounded semi-annually and monthly payments, the usual convention for a Canadian fixed-rate mortgage.
Are the starting figures realistic?
They are examples. Replace them with your own price, rent, taxes and expected returns.
Where these numbers come from
- Justice Laws Website — Interest Act, section 6 A mortgage rate is stated as calculated yearly or half-yearly, not in advance.
- Canada Revenue Agency — Principal residence A designated principal residence can be sold without tax on the gain.
- Government of Ontario — Residential rent increases The rent increase guideline for covered units.
Last verified 2026-10-25 The method on this page is checked against the sources above at least once a year. Spotted something out of date? Tell us and we will fix it.
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