Rent vs Buy Calculator

The rent-vs-buy question has no universal answer. It depends on your time horizon, the local market, available rent, purchase price, mortgage rates, and most importantly the return you can earn on the money you would otherwise put into a down payment. For horizons under 5 years, renting almost always wins after transaction costs (about 5% to sell). Beyond 7 to 10 years, mortgage leverage and home appreciation usually start to dominate, except in a correcting market.

This calculator compares two scenarios: (1) buy with an amortizing mortgage, pay property tax, condo fees, heat, and 1% maintenance per year, then sell at the end of the horizon with 5% transaction costs; (2) rent, invest the down payment plus any monthly cost difference between mortgage payments and rent at the given return rate. Owner net wealth = home value minus mortgage balance minus selling costs. Renter net wealth = the value of their invested portfolio.

Three sensitive assumptions deserve close attention. Historical Canadian home appreciation averages roughly 3 to 4 percent per year long-term, but varies hugely by region and is not guaranteed: testing your scenario at 1 to 2 percent appreciation is sound prudence. A 6% annual investment return is typical of a balanced 60/40 portfolio long term; you might use a lower rate if your investments are guaranteed. Finally, annual rent increases depend on provincial rules: Ontario caps increases (2.5% in 2025); Quebec's TAL publishes reference rates; BC and Alberta are more free-market.