Rent vs Buy Calculator

Compare the true costs of renting versus buying a home over time.

Home Purchase

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Renting

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Time Horizon

Rent vs Buy: Making the Right Decision

Deciding whether to rent or buy is one of the biggest financial decisions you'll make. This calculator helps you compare the true costs over time, including hidden expenses many people overlook.

Advantages of Buying

  • Equity Building: Monthly payments build ownership in your property
  • Appreciation: Potential for property value to increase over time
  • Stability: Fixed mortgage payments (versus rising rent)
  • Tax-Free Gains: Primary residence exempt from capital gains tax in Canada
  • Freedom: Renovate and customize as you wish

Advantages of Renting

  • Flexibility: Easy to relocate for career or lifestyle changes
  • No Maintenance: Landlord responsible for repairs and upkeep
  • Lower Upfront Costs: No down payment or closing costs
  • No Market Risk: Not exposed to property value declines
  • Liquidity: Down payment money can be invested elsewhere

Key Factors to Consider

Time Horizon: Generally need 5+ years to recoup buying costs. Shorter stays favor renting.

Local Market: In expensive markets, renting may be more cost-effective. In cheaper markets, buying often wins.

Lifestyle: Value flexibility and career mobility? Renting may suit you better. Want stability and long-term roots? Buying might be right.

Financial Position: Can you afford the down payment without depleting emergency funds? Do you have stable income for mortgage payments?

Disclaimer

This calculator provides estimates for comparison purposes only. Actual costs vary significantly based on location, property, market conditions, and personal circumstances. Consult with financial advisors before making major housing decisions.

FAQ

Is it better to rent or buy?

It depends on your situation, local market, and how long you plan to stay. Buying builds equity but has upfront costs and maintenance. Renting offers flexibility but no equity buildup. Use this calculator to compare total costs.

How long should I stay to make buying worthwhile?

Generally 5+ years. This allows you to recoup closing costs and build meaningful equity. Shorter stays favor renting due to upfront transaction costs.

What costs are included in homeownership?

Mortgage payments, property taxes, insurance, maintenance (1-3% of home value annually), utilities, HOA fees, and closing costs when buying/selling.

What about tax benefits of homeownership?

In Canada, your primary residence is exempt from capital gains tax. However, mortgage interest is not tax-deductible like in the US (except for rental/investment properties).

Should I include opportunity cost?

Yes. Money tied up in a down payment could be invested elsewhere. This calculator compares housing costs, but consider what your down payment could earn if invested.