Rent vs Buy Calculator Canada

Renting is not throwing money away, and buying is not automatically winning: the answer depends on the price-to-rent gap, how long you stay, and what your down payment would have earned invested. This calculator runs both paths over the same years, including selling costs when you buy and investment growth on the cash difference when you rent.

Home price ($)Down payment ($)Mortgage rate (%)Mortgage amortization (years)Rent for a similar home, per month ($)Rent increase per year (%)Home price growth per year (%)Property tax + home insurance, per month ($)Maintenance, % of home value per yearReturn if the difference is invested (%)Years you will stay

The renting path assumes the renter invests the down payment and every monthly cash-flow difference, and the buying path assumes a 5% selling cost at the end. Real results swing with local prices, rent control rules and market returns; run your own stay length, because time is the biggest variable.

How it works

The honest comparison is end wealth on the same monthly budget. The buyer ends with home equity: the home’s value after 5% selling costs, minus the mortgage still owed. The renter ends with an investment account: the unspent down payment plus every month’s cash-flow difference between owning costs and rent, invested. Whichever pile is bigger after your stay is the path that left you wealthier, and this calculator shows both piles.

Stay length dominates everything. Buying carries heavy one-time costs at both ends, so short stays usually favour renting even in strong markets, while long stays let the fixed mortgage payment and growing equity pull ahead. Change only the years on this calculator and watch the verdict flip.

Worked example

The calculator’s own output for the default example:

Item	Amount
Home price / down payment / mortgage	$600,000.00 / $120,000.00 / $480,000.00 at 4.50%, 25 years
Monthly mortgage payment	$2,656.67
Home value after 5 years at 3% growth	$695,564.44
Mortgage still owed after 5 years	$421,422.66
Equity after 5% selling costs	$239,363.56
Total rent paid over the same 5 years	$176,612.64
Renter’s investment account after 5 years	$199,592.05
Verdict on these assumptions	Buying leaves you ahead by $39,771.51

Frequently asked questions

Is renting really throwing money away?

No. Rent buys housing, flexibility and freedom from maintenance and selling costs. Owners also ‘throw away’ money on interest, tax, insurance and upkeep; in the default example here, the owner’s unrecoverable costs in the first 5 years are well over $100,000.

What is the 5% rule for rent vs buy?

A common shortcut: multiply the home price by 5% and divide by 12 for a rough monthly ownership cost equivalent. If you can rent a similar home for less than that figure, renting is often competitive. On a $600,000 home the rule gives $2,500 a month.

How long do I need to stay for buying to win?

Frequently 5 to 10 years in Canadian cities, depending on the local rent-to-price ratio and price growth. This calculator’s horizon field exists precisely because there is no universal answer.

Does the calculator include mortgage insurance?

No. With less than 20% down, a CMHC premium (up to about 4% of the mortgage) is added to the loan in Canada and raises the buying cost; enter a larger effective mortgage by lowering your down payment input cautiously, or treat the result as a best case for buying.

What about rent control?

In Ontario, most homes first occupied before November 15, 2018 have guideline-capped rent increases (2.1% for 2026 on the provincial guideline), while newer units do not. A capped rent makes the renting path stronger than a high rent-growth assumption shows.

More free calculators

For education only. This calculator gives estimates, not financial, tax or legal advice. Figures use 2026 rates where a rate is built in; confirm your own numbers before making a decision.