🏠Rent vs Buy Calculator

Land Transfer Taxes and Closing Costs

In Canada, buying a home involves significant upfront costs. Most provinces charge a Land Transfer Tax (LTT), and cities like Toronto have an additional municipal tax. CMHC recommends budgeting 1.5% to 4% of the purchase price for closing costs. Our calculator includes these 'sunk costs' to show you how many years you need to live in the home to break even compared to renting a similar property in major Canadian hubs.

CMHC – Buying a Home

Rent Control and Tenant Rights

Provinces like Ontario and British Columbia have rent control laws that limit annual rent increases for many tenants. This protection can make long-term renting more financially attractive than buying at a market peak. Statistics Canada reports that nearly 32% of Canadians rent their homes. Use this tool to see if your 'controlled' rent growth is outpaced by the rising costs of Canadian homeownership.

Statistics Canada – Housing

The Opportunity Cost of the Down Payment

When you buy in Canada, your down payment (minimum 5% to 20%) is locked in home equity. The Financial Consumer Agency of Canada (FCAC) highlights the 'opportunity cost' of this capital. If that same money were invested in a balanced TFSA or RRSP portfolio achieving 6-7% returns, would you be wealthier in 10 years? Our calculator simulates this investment alternative, helping you see the true cost of 'forced savings' through a Canadian mortgage.

Financial Consumer Agency of Canada (FCAC)

What is the 'Price-to-Rent' ratio in Canada?

This ratio is calculated by dividing the average house price by the average annual rent. In cities like Vancouver and Toronto, this ratio is often above 25, suggesting that renting is statistically cheaper. In the Prairies or Atlantic Canada, ratios are often lower, making buying more attractive. This tool helps you find your personal ratio based on your specific local Canadian listing prices.

Does this tool account for Canadian mortgage rates?

Yes, our calculator uses current Canadian prime rates and fixed/variable options. With the Bank of Canada's recent rate shifts, the 'cost of borrowing' has drastically changed the rent-vs-buy equation for many Canadians. We also include the mandatory CMHC mortgage insurance for down payments under 20%, which is a unique cost factor in the Canadian housing market.

Is homeownership still the 'Canadian Dream'?

While 66.5% of Canadians own their homes, the dream is becoming harder to achieve for Gen Z and Millennials. Renting allows for greater mobility and less financial risk in a volatile market. Our calculator removes the 'emotional' bias and focuses on the math, showing you the exact crossover point where buying becomes more profitable than renting in your specific province.

What This Calculator Accounts For:

• Purchase costs (down payment, closing costs, fees)
• Monthly costs (mortgage, HOA, taxes, maintenance)
• Opportunity cost (down payment invested vs tied up)
• Home appreciation and rent inflation
• Selling costs (commission, taxes)

Why does the calculator say renting is better when everyone says to buy?

Conventional wisdom ignores opportunity cost - the money you could make by investing your down payment and monthly difference. In many markets, especially in major cities, the math favors renting. The outcome depends heavily on local prices, interest rates, and how long you plan to stay.

But rent doesn't build equity!

Correct, but the money you save renting CAN build equity - through investments. If you invest $100,000 down payment + $1,500/month difference at 8% annually for 20 years, you'll have over $1 million. Buying a home isn't the only way to build wealth.

What if home prices rise a lot?

The calculator lets you adjust the appreciation rate. But remember: historically, real estate appreciates about 3-5% annually (similar to inflation), while the stock market returns 7-10%. Also, when home prices rise, rents rise too - maintaining the ratio. Periods of exceptional appreciation are hard to predict and shouldn't be the basis for your decision.