Mortgage · Canada
Rent vs buy.
Project the total cost of renting against owning over your time horizon, factoring in equity, appreciation, and the rent you would have paid.
Renting versus buying comes down to comparing the total cost of owning (mortgage interest, property tax, maintenance, and the return your down payment could have earned) against rent, net of the equity and appreciation you keep when you own. This calculator projects both over the years you enter; the result depends heavily on the appreciation and rent-growth assumptions you choose.
Method: a standard formula, shown on this page. No government rate or table is used.
Cite this page: TNAADO Tools, “Rent vs Buy Calculator”, https://tools.tnaado.ca/calculators/mortgage/rent-vs-buy-calculator/
Inputs
Comparison
Fill the form and press Calculate.
How this comparison works
The model totals what you'd pay over the time horizon when renting (rent + assumed 0% return on the down payment held in cash) versus owning (mortgage payments, property tax, maintenance, less the home equity and appreciation gained). The numbers ignore taxes and closing costs; use them as a directional guide, not a definitive answer.
Worked example: a $650,000 home against $2,400 rent
The calculator’s starting inputs describe a $650,000 home bought with $130,000 down (20%, so no CMHC premium), a 5.5% rate on a 25-year amortization, $4,500 a year in property tax, $3,000 a year in maintenance and 3% annual price growth, compared with renting at $2,400 a month with rent rising 2.5% a year. After 5 years the page reports: Buying is $83,193 cheaper.
| Line | Buying, 5 years | Renting, 5 years | Buying, 10 years | Renting, 10 years |
|---|---|---|---|---|
| Down payment | $130,000 | — | $130,000 | — |
| Mortgage paid | $190,442 | — | $380,884 | — |
| Property tax + maintenance | $37,500 | — | $75,000 | — |
| Rent paid | — | $151,382 | — | $322,657 |
| Equity built (home value less balance) | $289,753 | — | $483,518 | — |
| Net cost | $68,189 | $151,382 | $102,366 | $322,657 |
Net cost of buying = down payment + mortgage payments + property tax + maintenance − equity, where equity is the grown home value minus the mortgage balance left. The assumption that matters most is price growth. Holding everything else at the defaults and changing only the 5-year price growth:
| Annual price growth | Result after 5 years |
|---|---|
| 0% | Renting is $20,335 cheaper |
| 1% | Buying is $12,822 cheaper |
| 3% (default) | Buying is $83,193 cheaper |
The verdict flips between 0% and 1% growth, which is why a rent-versus-buy answer should be read as a range, not a point. Over longer horizons at the default 3% growth the same inputs give:
| Horizon | Result |
|---|---|
| 3 years | Buying is $43,976 cheaper |
| 5 years | Buying is $83,193 cheaper |
| 7 years | Buying is $131,013 cheaper |
| 10 years | Buying is $220,291 cheaper |
| 15 years | Buying is $421,996 cheaper |
| 20 years | Buying is $701,471 cheaper |
Next steps: see whether you can carry the payment with the affordability calculator, work out the up-front cash with the closing costs calculator, or check the down payment with the down payment calculator.
How this is calculated
- Mortgage: a 25-year amortization at your rate with Canadian semi-annual compounding (Interest Act, s. 6); the payment is multiplied by the months in the horizon and the remaining balance is read off the amortization schedule.
- Home value = price × (1 + growth)years; equity = home value − remaining mortgage balance.
- Owning = down payment + mortgage payments + property tax × years + maintenance × years − equity. Property tax and maintenance are held flat.
- Renting = twelve months of rent a year, with the rent raised by your rent-increase rate each year.
Everything comes from your inputs and the page’s own arithmetic; no market data feeds in. It deliberately leaves out land transfer tax and legal fees on purchase, agent commission and costs on sale, any investment return on the down payment (the cash is treated as earning nothing) and income tax. Each of those can change the answer, and the FCAC notes that a down payment under 20% requires mortgage default insurance, which this example avoids by assuming 20% down (FCAC, Down payment, checked 1 October 2026).
A planning illustration, not financial advice. Real house prices and rents can fall as well as rise.
TNAADO Inc. · Toronto
The comparison is not rent against mortgage payment
The honest comparison is the unrecoverable cost of each. For renting, that is the rent. For owning, it is property tax, insurance, maintenance, condo fees, the mortgage interest (not the principal, which is savings) and the opportunity cost of a down payment sitting in a house instead of invested. Set those against each other and the answer turns on the local ratio of price to rent rather than on the two payment figures.
The mistake people make. Counting the whole mortgage payment as a cost and the whole of any price appreciation as a gain. Principal repayment is a transfer from one pocket to another. Appreciation is realised only on sale, and it arrives after commission, legal fees and the land transfer tax that was paid on the way in. A short hold rarely clears those costs.
Frequently asked questions
What counts as the cost of owning in this calculator?
The down payment, every mortgage payment in the horizon, property tax and maintenance, less the equity you hold at the end (home value minus the mortgage balance). Subtracting equity is what makes ownership a net cost rather than a gross one: you still own the asset at the end.
Why can a small change in home price growth flip the result?
Because equity is large relative to the net cost. On the defaults, 0% growth gives “Renting is $20,335 cheaper” over 5 years, while 1% growth gives “Buying is $12,822 cheaper”. Test low, flat and high growth before relying on a result.
What does the calculator leave out?
Purchase costs such as land transfer tax and legal fees, selling costs such as commission, any return you could earn by investing the down payment instead, income tax, and rises in property tax or maintenance. Use the closing costs and land transfer tax calculators for the purchase side.
Do I need 20% down to buy?
No, but with less than 20% down you need mortgage default insurance, and the premium is added to the mortgage. The FCAC describes tiers of down payment and the $1.5 million price limit for insured purchases. This example uses 20% down, so there is no premium to add.
How long do I need to stay in a home for buying to win?
It depends on your inputs. On the defaults buying is ahead at every horizon from 3 years to 20 (see the horizon table above), but at 0% price growth the 5-year result reverses. Run your own rent, price growth and rate; the break-even horizon is the first row that favours buying.
Disclaimer
Estimates for educational purposes only. Real outcomes depend on local market, taxes, investment returns, and personal lifestyle factors.