Free calculator · Mortgage Basics
Rent vs Buy Calculator
Compare the long-run cost of renting with buying a home in Canada, including closing costs, equity build-up, and investment returns.
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| Year | Buy net cost | Rent net cost | Difference |
|---|---|---|---|
| — | — | — | — |
Estimates only. Results are not a quote, pre-approval, or approval.
How this is calculated
Buying is measured as cash out minus equity built. Cash out is the down payment, closing costs, land transfer tax, every mortgage payment, property tax, maintenance, and insurance over the horizon. Equity built is the down payment plus the principal you have repaid; the mortgage payment uses the Canadian fixed-rate convention, where the effective monthly rate is (1 + annual rate ÷ 2)1/6 − 1 and the payment is L × i ÷ (1 − (1 + i)−n). Net buying cost is therefore the transaction costs plus interest, tax, maintenance, and insurance. Renting is measured as total rent paid, rising by your chosen annual increase, minus the investment growth the down payment would have earned if it had been invested instead at your chosen return.
The tool steps through the months, buckets them into years, and reports the cumulative net cost of each path. The break-even year is the first year in which the cumulative net cost of buying falls to or below the cumulative net cost of renting. Before that point, renting is cheaper on this measure; after it, buying is. If the lines never cross within your horizon, the tool tells you so rather than forcing an answer.
What the model deliberately leaves out, so you can read it correctly:
- Home price changes, sale commissions, and selling costs. It assumes the home is held, not sold, and that its price is flat.
- Renter's insurance, utilities, condo fees, and the tax treatment of a principal residence or an investment account.
- Mortgage default insurance premiums on a high-ratio purchase and any prepayment or renewal changes to the rate.
All figures are estimates for planning only, not a quote, pre-approval, or approval. Use your own confirmed numbers for rent, taxes, and returns before you decide.