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Mortgage Squad Advisors
Free Calculator · Vaughan, Ontario · FSRA #13737

Rent vs. Buy
Calculator —
find your break-even.

See which path builds more net worth. Adjust home price, down payment, rate, and rent to find the year buying overtakes renting — or vice versa.

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Rent vs. buy — which builds more wealth?

Fact-checked by Surrayya Afzal, Principal Broker, FSRA #M14001433·Last reviewed October 2026
The short answer

Buying beats renting after a break-even year that depends on how long you stay, rates and local prices. A fair test counts property tax, upkeep and what your down payment could earn elsewhere.

Your numbers

$700k
$140k
5.04%
$3k
7 yrs
Renting comes out ahead by
$6,891
After 7 years (net worth difference)
After 7 years
Buy — net worth (home equity)$360,950
Rent — net worth (invested)$367,842
Owning cost / month$4,436
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Read the full explanationThe rules behind the numbers, with worked examples.

Renting isn’t throwing money away — and buying isn’t always winning

The honest comparison isn’t rent vs. mortgage payment — it’s the total net cost of each path once you account for what the money does on the other side. A buyer’s payments build equity, but they also sink cash into property tax, maintenance, interest and selling costs. A renter pays no closing or selling costs and can invest the down payment and any monthly savings instead.

The chart below tracks the opportunity-adjusted net cost of each option year by year. The lines usually cross at a break-even point for your inputs after which ownership tends to pull ahead because equity compounds and the big upfront costs get spread thin. Stay shorter than break-even and renting frequently wins.

These figures are illustrative and sensitive to your assumptions about appreciation, investment returns and rent inflation. When you’re ready to test a real purchase, run the numbers on our affordability calculator and payment calculator.

Cumulative net cost — rent vs. buy

Lower line is cheaper. The cross-over is your break-even point. Illustrative, based on the stated assumptions.

Buy (net of equity) Rent (net of investing)
-$228,000-$164,000-$100,000-$36,000$28,000Now1y2y3y4y5y6y7y
At year 7, renting has the lower opportunity-adjusted net cost — by $6,891.
How to use this calculator
  1. Enter your numbersSet your home price, down payment, mortgage rate, monthly rent, and how long you plan to stay. Adjust each slider to match your real scenario.
  2. See your break-even yearThe chart projects your net worth both ways — buying (home equity, net of selling costs) vs. renting (your down payment invested). The crossover is your break-even point.
  3. Talk to a brokerReady to act on your numbers? We'll model your situation with real rates from 100+ lenders and show you every number before you commit.
How this is calculated
Assumptions: 3% home appreciation, 5% investment return, 3% annual rent growth, 1% property tax, 1% maintenance, 4% selling cost, 25-year amortization; renter invests the down payment + any monthly savings. The default rate is illustrative, not a quote. Down payment can't go below the Canadian minimum (5% of the first $500K, 10% above; 20% at $1.5M+). Under 20% down includes mortgage default insurance (Department of Finance, December 2024 rules). Land transfer tax, purchase legal fees, insurance-premium sales tax and investment income tax are excluded. Both paths start with the same down-payment cash; the cheaper monthly path invests the difference at month-end. The chart shows starting cash minus ending net worth, so its gap equals the headline. Property tax and maintenance grow with the assumed home value; rent grows annually. Directional, not advice.
FAQ

Common questions

Don’t see yours? Ask Maya.

Is it better to rent or buy in Canada?
It depends on how long you'll stay, price-to-rent in your market, and what you'd earn investing instead. The result depends on appreciation, investment returns and costs; renting can win for short stays or in markets where rent is cheap relative to prices.
What assumptions does this use?
Home appreciation ~3%/yr, investment return ~5%/yr, property tax ~1%/yr, maintenance ~1%/yr, rent growth ~3%/yr and ~4% selling costs, with a 25-year amortization. The renter invests the down payment. Whichever path costs less each month invests the difference; both use the same 5% return. Mortgage insurance is included below 20% down. Purchase land transfer tax and legal costs are excluded. The default mortgage rate is an illustrative assumption, not a quote; check today's rates and enter your own.
Why does the break-even take a few years?
The main transaction cost modelled here is 4% selling cost; land transfer tax and legal fees are not modelled and push break-even out further. It takes a few years of equity build + appreciation to clear those, which is why short stays often favour renting.
Does buying always win long-term?
No. In markets where rent is very cheap relative to price, disciplined investing of the difference can rival or beat buying. Over longer stays ownership often comes out ahead, but the result depends heavily on appreciation, rates and how consistently the renter actually invests.
How many years until buying beats renting?
It varies widely by market and assumptions; the result is driven by how fast prices appreciate versus how cheaply you could rent and invest instead. The chart above marks your specific break-even year so you can see whether your expected stay clears it.
Does this account for rent increases and closing costs?
The chart grows rent ~3%/yr and folds ~4% selling costs into the buying side, plus property tax and maintenance. It does not model land transfer tax or capital-gains tax on investments, so treat it as directional. For exact purchase costs use our affordability calculator, which includes land transfer tax and closing costs.
What assumptions does the calculator use?
Home appreciation ~3%/yr, investment return ~5%/yr, property tax ~1%/yr, maintenance ~1%/yr, rent growth ~3%/yr, and ~4% selling costs — with a 25-year amortization. The renter invests the down payment. Whichever path costs less each month invests the difference at the same 5% return. Mortgage default insurance is included below 20% down. Land transfer tax and purchase legal fees are not modelled.
How is the mortgage rate in this calculator determined?
The default rate shown is illustrative — not a quote. Enter your own rate to model your real situation. To see today's live rates, visit our rates page. We shop 100+ lenders to find the best rate for your file.
What should I do after running the calculator?
If the math points toward buying, the next step is knowing your exact budget. Use our affordability calculator to factor in your income and debt, and our payment calculator to model monthly costs. Then speak with one of our advisors — we'll confirm rates, run your actual numbers, and only recommend proceeding when it genuinely makes sense for you.
Words to know
AmortizationDown paymentLoan-to-value
Related calculators & guides
Rent vs buy: full guideAffordabilityPaymentDown payment
Related guides
Rent vs Buy in Canada: Should You Keep Renting or Buy?
See today’s rates behind these numbers: the Canadian Lending Snapshot

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