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). Honest math, Canadian-correct.
Buying usually beats renting once you stay about 5+ years, because equity and appreciation outgrow the one-time costs of buying and selling. 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.
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Lender-ready summary, your assumptions baked in, and a personalized note from an advisor at Mortgage Squad Advisors.
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 cumulative net cost of each option year by year. The lines usually cross at a break-even point — often around five years — 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.