Rent vs. Buy Calculator for Canadians 2025

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Buying a home can be a life-changing decision that will tie you down to one place for a long time. Deciding whether to rent or buy may impact your life in the long term, so it is important to consider what kind of opportunities renting or buying provides you with. With current market conditions, the right choice between buying and renting depends on your personal circumstances and your future plans.

The most important factor to consider when choosing between renting or buying is how long you think you will stay in a certain area. Renting usually comes with low upfront costs, relatively low monthly costs, and high flexibility but lacks equity building and the benefits of home appreciation. Buying a house requires a significant investment and commitment, with mortgages lasting up to 30 years. Still, homeowners enjoy the perks of ownership, including home appreciation and the freedom to change it in any way they want, subject to local laws and HOA rules.

When assessing renting and owning options, the longer you plan to stay, the more cost-efficient it will be to buy a house. This is because the home value generally appreciates over time, and the costs involved in buying and selling the house (approximately 5% of the property’s price) are amortized over a longer period of time. For shorter periods of time, your total expenses with a home may be much larger than the total expenses you would pay if you were to rent.

Our rent vs buy calculator enables you to compare the costs of renting and buying a property in specific areas in Canada with real-world data. It accurately estimates the most significant expenses, including:

• Property Tax
• Insurance Expense
• Maintenance or Condo Fees
• Closing Costs With Breakdown

It also provides insightful information about buying and renting a house in a specific area. This information includes the breakeven point between buying and renting a house, a multi-year cost comparison between the two options, and the average monthly cost of owning and renting a home. These metrics can help you decide about renting or buying a home in an area of your choosing.

Our calculator analyzes the data we collect on local property taxes, mortgage rates, closing costs, and other expenses to provide the most accurate and personalized results. Even though it estimates and provides default values for many inputs, you should ensure that the estimations align with your understanding of the market. You can always change the estimates to adjust the information to your specific needs. Important inputs you should consider adjusting to better fit your situation are as follows:

• Estimated Rent: Estimate the rent you may have to pay by comparing different rental properties on the market and enter this amount into the calculator.
• Purchase Price: Estimate the price for a property you want to buy by looking at the home prices that look similar to your desired property. When looking at properties, consider the property type (condo, semi-detached, townhouse, detached) and features such as the number of bedrooms and bathrooms.

• Down Payment: The minimum down payment in Canada depends on the property's purchase price. A down payment of less than 20% may also trigger the need for CMHC insurance, which adds to the mortgage principal, and the tax adds to closing costs.

  Minimum Down Payment	Purchase Price Limits
  5%	$500,000 or less
  5% on first $500k and 10% after	$500,000 - $1,500,000
  20%	$1,500,000 or more

• Mortgage Rate: The interest rate that the lender charges on your mortgage. Your mortgage rate will depend on many factors, including your credit history and down payment. Our calculator provides the currently best mortgage rate in Canada.
• Amortization Period: The total length of time that you will take to pay off your mortgage. The most common amortization in Canada is 25 years, but it can be as long as 30 or more in some extreme cases. You have to renew your mortgage periodically, which resets your interest rate to the most current one.

There are many factors to consider before determining what option works better for you. Different factors may be important in determining the optimal option depending on your financial situation and future plans. The following list discusses some of the most important factors in the decision of whether to rent or buy:

Upfront Cost: Buying a house requires a lot of money upfront. In many parts of Canada, you need a significant amount saved to buy your home. This is a critical problem for most young people and some older people as they simply cannot buy a property without sufficient savings. If you do not have the money to cover the upfront costs, such as down payment, land transfer tax, and closing costs, you have to settle for renting, even if it makes sense to buy financially.

Flexibility: Buying a home is one of the biggest investments in many people's lives, and it comes with a lot of responsibility. Unlike stocks or other investments, homeownership requires constant maintenance, which is the homeowner's responsibility. A long-term mortgage also means you must have enough money to cover the monthly obligations for a long time. This makes homeowners lack flexibility in their movement, especially given that the cost of selling a house is also large.

Periodic Payments: Both renting and owning a house require periodic payments. Rental payments are usually more stable and less expensive than mortgage payments and maintenance costs. This means that people with lower incomes may feel more comfortable renting in the short term since it is more financially predictable and cheaper.

Equity Building: Homeowners contribute to their principal every time they make a mortgage payment. This means that they build equity in a usually appreciating asset. This can be viewed as a savings account that also provides a return in the future. Renters do not have the ability to build equity in their homes.

Financial Risk: Just like any debt, mortgages can be risky for homeowners. If they cannot pay their mortgage, they will likely lose their home and the previous payments they have made on it. They may also still be left owing money after they liquidate their assets. Renters do not have a mortgage, which means that they do not have a financial risk related to buying a home.

Control: A homeowner has total control over the renovations, decorations, and any repairs happening in the house, subject to local laws and HOA rules, if applicable. A renter may have a certain control over the space they rent, but the landlord must largely approve any alterations to the rental property.

Maintenance: A homeowner is responsible for all maintenance in their home. They may pay someone or do everything themselves, but they have the sole responsibility to keep the property in good shape. If the house requires significant repairs due to lack of maintenance, the homeowner is likely to be responsible for them. A tenant has minimal maintenance responsibilities that usually revolve around keeping the unit clean and any small-scale repairs under $50.

Tax Benefits: A homeowner can use mortgage interest payments and some other expenses to deduct from taxes. Sometimes, it may not make a significant difference, but it can also provide some savings for the homeowner. A tenant is likely to receive tax benefits, but there are programs that the government puts in place to benefit low-income renters in high-cost areas.

Let’s say you buy a house outside of Toronto for $600,000. You cover a down payment of 10% ($60,000) and closing costs of around $9,000, which includes land transfer tax. Your mortgage rate is 5%, and your mortgage amount is $540,000, with a monthly payment of $3,157 for 25 years. You also expect your property tax, home insurance, and maintenance to add up to $7,000 annually. You also know that you will incur 5% of the home price in closing costs if you sell your home with your property appreciating by about 2% yearly. If you choose to buy, you expect to pay $69,000 upfront, $44,884 annually, and 5% of the home price as the cost of selling the house.

You can also rent a home for $2,500 per month, including utilities. If you decide to rent, you expect to pay $30,000 annually, with a 2% rent increase every year.

We can see that the breakeven point between the two happens during the 3rd year of homeownership. Due to appreciation, the average homeownership cost turns negative in future years, which indicates that the homeowner will make money on the appreciation.

Buying is generally recommended if you plan to reside in an area for a long period of time. There are many advantages to buying a home, including:

• No Evictions: If you rent, you are always at risk of being evicted. For example, the Landlord and Tenant Board in Ontario allows landlords to evict tenants if they sell the property, use it for personal use, or renovate it. If you own your home, you will almost always have the right to live there.
• Rental Income: If you have spare rooms or suites in your new home, you can rent them out for extra income. The rent you collect can help you cover your mortgage payments. To check how much rental income a rental property can generate for you, use WOWA’s Rental Property Calculator.
• Indirect Saving: Home purchases will help you build equity in your home, which can be a great savings vessel and a source of wealth. A homeowner should also consciously save from their income, which builds discipline and better saving habits.
• Long-Term Investment: A home can be a long-term investment. Depending on the housing market you choose to buy a property, you can benefit from the increase when you eventually sell your home. You can also access your home equity at very low interest rates using a mortgage refinancing or a Home Equity Line of Credit (HELOC).

Renting is generally recommended if you do not plan to stay in a specific location for a long period of time. There are many advantages to renting instead of buying, and these include:

• Flexibility: Renting allows you to move and change locations easily. Renting might offer the flexibility you need if you plan to upsize, downsize, or move soon.
• No Closing Costs: Renters must pay a rental fee and possibly utility bills. There are no costs associated with getting a new home to rent or to move out of your rental home. In contrast, buyers must pay closing costs of up to thousands of dollars.
• No Down Payment: The mortgage down payment on a home could be a large amount of money to save up for and pay upfront. When renting, you only need to pay the first and last month's rent and sometimes a key or security deposit. Generally, the deposits associated with renting are much cheaper than the down payments on a house, which makes renting a much more affordable option to most people than buying.
• Less Maintenance: Homeowners are responsible for home maintenance and broken appliances. This can include expenses for maintenance issues such as roof repairs, replacing a washing machine, broken light fixtures, and more. As a renter, these expenses are covered by your landlord. However, depending on your agreements with your landlord, you might be required to pay your own utilities and electricity bills and shovel the snow/mow the lawn.

The Landlord and Tenant Board is an adjunctive tribunal that provides dispute resolution services to landlords and tenants. The Residential Tenancies Act or a similar document is the law that governs relations between landlords and tenants in an applicable province. If you choose to rent, you should know your rights as a tenant. For instance, landlords are allowed to evict tenants in different provinces for different reasons. If you are wrongfully evicted or the landlord evicts you in bad faith, you may be entitled to eviction protection from the Landlord and Tenant Board and/or monetary claims for damages.

The Landlord and Tenant Board of Ontario allows landlords to evict tenants for various reasons, such as the landlord wanting the property for personal use, selling the property, or planning to renovate/demolish/repair it.

The Landlord and Tenant Board of Alberta allows landlords to evict tenants if the tenant fails to pay rent, breaks rental agreements, causes damage to the property, or disturbs/endangers others on the premises.

The Landlord and Tenant Board of Saskatchewan allows landlords to evict tenants for many reasons. These include cases when the landlord or landlord’s family wants the property for personal use, if the tenant fails to pay rent or utilities, if the landlord plans to sell the property, or if the landlord plans to demolish or renovate the property.

The Landlord and Tenant Board of British Columbia allows landlords to evict tenants for many reasons. Some common reasons include wanting the property for personal use, planning to demolish or renovate the unit, or failing to pay rent or utilities.

The Residential Tenancies Act of each province also specifies the maximum percentage rent increase that your landlord can increase your rent each year. This ensures you will not end up paying unreasonable amounts on your rental agreement.

The government offers three main incentives to help first-time home buyers with home purchases.

The Land Transfer Tax is a tax levied by the provincial government payable at the time of closing. The Land Transfer Tax Rebate is a rebate on the Land Transfer Tax that the provincial government offers to first-time home buyers. Depending on the province, this rebate can be for the full or partial amount of the tax.

The RRSP Home Buyer’s Plan allows you to withdraw up to $60,000 tax-free from your RRSP to help pay for the purchase of your new home. This amount must be repaid within 20 years. Down payment assistance can help you reach the needed down payment percentage to qualify for the property.