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Calculator · Rent vs Buy

Rent vs. buy — which builds more wealth?

We project your net worth after a few years either way: buying (home equity, net of selling costs) vs. renting (your down payment + monthly savings invested). Simplified Canadian assumptions, shown in full below.

Updates as you type| Built on Canadian mortgage rules| Ontario-licensed brokerage| Built by FSRA-licensed brokers

Fact-checked by Surrayya Afzal, Principal Broker, FSRA #M14001433· Last reviewed October 2026 · Reviewed monthly

The short answer

Whether buying beats renting depends on your stay, rates and local price-to-rent; the chart shows your break-even year for these inputs. But the fair comparison includes property tax, maintenance, and the opportunity cost of your down payment — not just rent vs the mortgage payment. This projects your net worth both ways. Enter your numbers to find your break-even.

Your inputs

$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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Deeper analysis

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 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.
Mortgage glossary— terms that matter for this calculator
Amortization Down payment Loan-to-value
Common questions

Frequently asked

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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.
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