Canada Rent vs Buy Calculator 2026
Your scenario
Renting
Buying
Raised to the Canadian minimum if it is lower.
Compounded twice a year, like Canadian fixed-rate mortgages.
Assumptions
Enter your numbers to compare renting and buying.
How the comparison works
The tool runs a month-by-month comparison over the time horizon you pick. The renter invests the cash that would have gone into the purchase, then invests the difference in any month when renting costs less than owning. The buyer's result is the home's value after selling costs and the remaining mortgage, plus any cash saved in months when owning costs less.
Whichever total is higher wins. If the two are within about 2% of the home price (and at least $10,000), the result is a close call. The buyer's costs include the Canadian minimum down payment, mortgage default insurance below 20% down, closing costs, property tax, home insurance, maintenance and condo fees.
Small changes in rate, rent growth or appreciation can flip the answer, so run it again with cautious numbers before you rely on it. Keep selling costs in as well. Leave out commission, legal fees and moving costs, and a short stay will look better than it really is.
When renting or buying tends to win
Renting tends to win when
- You may move within three to five years. Closing costs such as land transfer tax and legal fees, plus selling commission, can wipe out whatever equity you have built.
- You live in an expensive market like Toronto or Vancouver, where owning can cost far more than renting a comparable place. Invest that monthly gap and it adds up.
- You reliably invest the down payment and the monthly savings instead of spending them.
- Home prices are flat or falling, which takes away the main argument for buying.
Buying tends to win when
- You stay seven to ten years or longer, which gives mortgage paydown and appreciation time to overtake the upfront costs.
- Renting a comparable place costs nearly as much as owning, so the equity you build and any appreciation tip the balance toward buying.
- Home values keep growing. Even 2% to 3% a year compounds on the full home value, which is a much larger base than the down payment alone.
- You want a stable payment, because a fixed-rate mortgage holds steady for the term while rent can rise at every lease renewal.
Break-even and opportunity cost
Most rent-or-buy decisions come down to a break-even point: the number of years you must stay before buying overtakes renting. Your mortgage rate, home appreciation, rent growth and selling costs all shift it, so a calculator will serve you better than a rule of thumb. Change the time horizon until the winner flips. That year is your break-even.
A renter's down payment doesn't disappear. It can sit in a TFSA, RRSP, FHSA or taxable account and keep growing, so a fair comparison sets the buyer's home equity against the renter's invested portfolio, which is what this calculator does. First-time buyers should also look at the First Home Savings Account (FHSA), which can shift the down-payment math in a buyer's favour.
Provincial and municipal land transfer tax is part of the closing costs you enter, and it is notably higher in Toronto, which adds a municipal layer on top of Ontario's. Rent control also differs by province, since Ontario, British Columbia and others cap annual increases on many units, so use local figures for the rent increase as well.
Sources
Rent vs buy questions
Is it better to rent or buy in Canada in 2026?
It depends on your numbers. Buying usually comes out ahead when you stay for several years, mortgage rates are manageable and home values hold or rise. A short stay is different, and so is a home that costs far more to own each month than renting a comparable place. In those cases, a renter who invests the down payment and monthly savings often ends up with more. Enter your city's rent, home price and mortgage rate to see which path leaves you with more net worth.
What is the 5% rule for renting vs buying?
The 5% rule is a shortcut for estimating the unrecoverable cost of owning. Multiply the home price by 5% and divide by 12. The result roughly covers property tax, maintenance and the return your down payment could have earned if invested. If that monthly figure is higher than rent on a comparable place, renting and investing the difference may cost less. The rule ignores your mortgage rate, time horizon and selling costs, which this calculator includes.
Is renting throwing money away?
No. Renters don't build home equity, but buyers pay costs that never become equity: mortgage interest, property tax, maintenance, home insurance, condo fees, and closing and selling costs. A renter who invests the down payment and monthly savings can match or beat a buyer, especially over a short stay. This calculator puts a dollar figure on the gap.
How many years do you need to stay in a home for buying to be worth it?
Five years is a commonly quoted break-even point in Canada, but yours depends on the purchase price, mortgage rate, closing and selling costs and home appreciation. Buying carries large costs on the way in and on the way out. A short stay gives appreciation and mortgage paydown little time to cover them. Change the time horizon in the calculator to find your own break-even year.
Can I use this as a mortgage approval calculator?
No. It compares two scenarios. It does not check lender approval, the stress test, debt-service ratios or insured mortgage eligibility. A mortgage broker or lender can tell you what you would qualify for.
This is a simplified planning estimate. It does not model lender qualification, exact mortgage insurance premiums, tax effects, repairs or a specific realtor's terms. Pilot Wealth does not guarantee investment returns, appreciation, rent increases or affordability, so confirm your assumptions with qualified mortgage, tax, legal, real estate and financial professionals before you commit.