Rent vs Buy

Renting is not throwing money away and buying is not automatically building wealth. The honest comparison is between two whole positions: a home you would have to pay to sell, and a portfolio holding everything buying would have consumed. This runs both, year by year, under Canadian tax.

Home price

Down payment

Interest rate

Rent

$/mo

How long you stay

years

Assumptions and details21 more

The mortgage

Amortization

years

Term

years

Payment frequency

Compounding

Carrying costs

Condo fees / upkeep

$/mo

Fee increase

%/yr

Property tax

$/yr

Tax increase

%/yr

Home insurance

$/mo

Renting instead

Rent increase

%/yr

Renter’s insurance

$/mo

Assumptions

Home appreciation

%/yr

Investment return

%/yr

Invested in

Marginal tax rate

Where, and who

Province

Municipality

First-time buyer

Newly built home

Getting in and out

Other closing costs

Cost to sell

The calculators need no account. Sign in only if you want these assumptions remembered between visits, or to connect Claude.

Buying comes out ahead over 25 years, by $392,410. But the other path is ahead for the first 6 years — the crossover is in year 7, which is how long you would need to stay.

Cash to close

$200,950

$170,000 down · $30,950 closing costs

Owning, month 1

$4,251

Mortgage, condo fees, property tax and insurance

Renting, month 1

$2,830

Rent and contents insurance

Monthly gap

+$1,421

Owning costs this much more — it is what gets invested on the renting side

After 25 years

Buying by $392,410

Buying $1,690,726 · renting $1,298,316, both after the cost of getting out

Crossover

Year 7

How long you would have to stay for buying to win

Net worth, if you sold today

Buying is the home’s value less the mortgage and less what it costs to sell. Renting is the down payment and closing costs invested from day one, plus every month owning cost more — tax-free in a registered account.

Buying — equity after selling costsRenting — portfolio after tax

What each costs a year

Everything leaving the account: the whole mortgage payment, fees, tax and insurance against rent.

OwningRenting

Money that does not come back

Cumulative. Principal is not here — it moves pockets. Interest, fees, tax and insurance are gone in exactly the way rent is.

Buying — interest, fees, tax, insuranceRenting — all of it

How much this depends on the investment return

The same scenario at other returns. Your assumption is outlined. If the answer flips inside this range, it is not really an answer.

Buying ends aheadRenting ends ahead

Year by year

Every figure the charts are drawn from.

Year	Owning / yr	Renting / yr	Home value	Mortgage	Buying net	Renting net	Difference
1	$51,016	$33,960	$875,500	$664,397	$167,328	$230,063	−$62,735
2	$51,220	$34,979	$901,765	$648,118	$208,559	$260,107	−$51,548
3	$51,430	$36,028	$928,818	$631,133	$251,244	$291,115	−$39,871
4	$51,646	$37,109	$956,682	$613,411	$295,437	$323,119	−$27,682
5	$51,869	$38,222	$985,383	$594,921	$341,193	$356,153	−$14,961
6	$52,099	$39,369	$1,014,944	$575,629	$388,568	$390,252	−$1,684
7	$52,335	$40,550	$1,045,393	$555,501	$437,622	$425,453	+$12,169
8	$52,579	$41,767	$1,076,755	$534,500	$488,417	$461,792	+$26,625
9	$52,830	$43,020	$1,109,057	$512,588	$541,016	$499,310	+$41,706
10	$53,088	$44,310	$1,142,329	$489,726	$595,486	$538,047	+$57,439
11	$53,354	$45,639	$1,176,599	$465,873	$651,896	$578,044	+$73,851
12	$53,628	$47,009	$1,211,897	$440,986	$710,316	$619,347	+$90,969
13	$53,911	$48,419	$1,248,254	$415,019	$770,822	$662,000	+$108,822
14	$54,202	$49,871	$1,285,701	$387,927	$833,489	$706,050	+$127,439
15	$54,501	$51,368	$1,324,272	$359,660	$898,399	$751,547	+$146,852
16	$54,810	$52,909	$1,364,000	$330,167	$965,633	$798,541	+$167,092
17	$55,128	$54,496	$1,404,920	$299,396	$1,035,279	$847,085	+$188,194
18	$55,455	$56,131	$1,447,068	$267,290	$1,107,425	$897,235	+$210,190
19	$55,792	$57,815	$1,490,480	$233,792	$1,182,164	$949,046	+$233,118
20	$56,140	$59,549	$1,535,195	$198,842	$1,259,593	$1,002,579	+$257,014
21	$56,497	$61,336	$1,581,250	$162,376	$1,339,812	$1,057,896	+$281,916
22	$56,866	$63,176	$1,628,688	$124,329	$1,422,925	$1,115,060	+$307,865
23	$57,245	$65,071	$1,677,549	$84,632	$1,509,039	$1,174,138	+$334,902
24	$57,636	$67,023	$1,727,875	$43,214	$1,598,267	$1,235,199	+$363,068
25	$58,039	$69,034	$1,779,711	$0	$1,690,726	$1,298,316	+$392,410

What the $200,950 is made of

In Ontario, Toronto. Rates as of 2026-09.

Down payment 20% of $850,000 · minimum here is $60,000 $170,000

No mortgage insurance 80.0% loan-to-value — at or below 80%, none is required —

Ontario land transfer tax$13,475

Toronto municipal land transfer tax$13,475

Lawyer, title, inspection $4,000

Mortgage $3,684.64 monthly at 4.29%, compounded semi-annually $680,000

What you owe, and what you own

Equity is net of what it would cost to sell, which is why it starts below the down payment and takes a few years to catch up.

Still owingEquity, after selling costs

What ownership costs each year

Only the money that does not come back. Principal is excluded — it is saving, not spending.

InterestProperty taxCondo fees / upkeepHome insurance

The mortgage, year by year

Payments during the 5-year term are fixed; everything after it depends on the rate at renewal. Open this in the mortgage calculator to compare payment frequencies.

Year	Opening	Payments	Principal	Interest	Closing	Fees	Property tax	Insurance	Non-recoverable	Per month
1	$680,000	$44,216	$15,603	$28,613	$664,397	$0	$5,000	$1,800	$35,413	$2,951
2	$664,397	$44,216	$16,279	$27,936	$648,118	$0	$5,150	$1,854	$34,940	$2,912
3	$648,118	$44,216	$16,985	$27,230	$631,133	$0	$5,305	$1,910	$34,445	$2,870
4	$631,133	$44,216	$17,722	$26,494	$613,411	$0	$5,464	$1,967	$33,925	$2,827
5	$613,411	$44,216	$18,490	$25,726	$594,921	$0	$5,628	$2,026	$33,379	$2,782
6	$594,921	$44,216	$19,292	$24,924	$575,629	$0	$5,796	$2,087	$32,807	$2,734
7	$575,629	$44,216	$20,128	$24,087	$555,501	$0	$5,970	$2,149	$32,207	$2,684
8	$555,501	$44,216	$21,001	$23,215	$534,500	$0	$6,149	$2,214	$31,578	$2,631
9	$534,500	$44,216	$21,912	$22,304	$512,588	$0	$6,334	$2,280	$30,918	$2,577
10	$512,588	$44,216	$22,862	$21,354	$489,726	$0	$6,524	$2,349	$30,226	$2,519
11	$489,726	$44,216	$23,853	$20,363	$465,873	$0	$6,720	$2,419	$29,501	$2,458
12	$465,873	$44,216	$24,887	$19,328	$440,986	$0	$6,921	$2,492	$28,741	$2,395
13	$440,986	$44,216	$25,966	$18,249	$415,019	$0	$7,129	$2,566	$27,944	$2,329
14	$415,019	$44,216	$27,092	$17,123	$387,927	$0	$7,343	$2,643	$27,109	$2,259
15	$387,927	$44,216	$28,267	$15,949	$359,660	$0	$7,563	$2,723	$26,234	$2,186
16	$359,660	$44,216	$29,493	$14,723	$330,167	$0	$7,790	$2,804	$25,317	$2,110
17	$330,167	$44,216	$30,772	$13,444	$299,396	$0	$8,024	$2,888	$24,356	$2,030
18	$299,396	$44,216	$32,106	$12,110	$267,290	$0	$8,264	$2,975	$23,349	$1,946
19	$267,290	$44,216	$33,498	$10,718	$233,792	$0	$8,512	$3,064	$22,294	$1,858
20	$233,792	$44,216	$34,950	$9,265	$198,842	$0	$8,768	$3,156	$21,189	$1,766
21	$198,842	$44,216	$36,466	$7,750	$162,376	$0	$9,031	$3,251	$20,031	$1,669
22	$162,376	$44,216	$38,047	$6,169	$124,329	$0	$9,301	$3,349	$18,819	$1,568
23	$124,329	$44,216	$39,697	$4,519	$84,632	$0	$9,581	$3,449	$17,548	$1,462
24	$84,632	$44,216	$41,418	$2,798	$43,214	$0	$9,868	$3,552	$16,218	$1,352
25	$43,214	$44,216	$43,214	$1,002	$0	$0	$10,164	$3,659	$14,825	$1,235

What rent costs each year

Rising at 3% a year. Rent control caps increases for a sitting tenant in several provinces, but only while you stay.

Rent and contents insurance

The portfolio

Starting at $200,950 — the cash buying would have consumed — and taking whatever owning costs more each year.

Portfolio, before exit tax

Renting, year by year

In a TFSA or RRSP nothing is taxed on the way out, so the last two columns are the same. A negative contribution is a year renting cost more than owning, drawn from the portfolio.

Year	Rent / month	Rent / year	Invested that year	Portfolio	Tax if sold	After tax
1	$2,830.00	$33,960	+$17,056	$230,063	—	$230,063
2	$2,914.90	$34,979	+$16,241	$260,107	—	$260,107
3	$3,002.35	$36,028	+$15,402	$291,115	—	$291,115
4	$3,092.42	$37,109	+$14,537	$323,119	—	$323,119
5	$3,185.19	$38,222	+$13,647	$356,153	—	$356,153
6	$3,280.75	$39,369	+$12,730	$390,252	—	$390,252
7	$3,379.17	$40,550	+$11,785	$425,453	—	$425,453
8	$3,480.54	$41,767	+$10,812	$461,792	—	$461,792
9	$3,584.96	$43,020	+$9,810	$499,310	—	$499,310
10	$3,692.51	$44,310	+$8,778	$538,047	—	$538,047
11	$3,803.28	$45,639	+$7,715	$578,044	—	$578,044
12	$3,917.38	$47,009	+$6,620	$619,347	—	$619,347
13	$4,034.90	$48,419	+$5,492	$662,000	—	$662,000
14	$4,155.95	$49,871	+$4,330	$706,050	—	$706,050
15	$4,280.63	$51,368	+$3,134	$751,547	—	$751,547
16	$4,409.05	$52,909	+$1,901	$798,541	—	$798,541
17	$4,541.32	$54,496	+$632	$847,085	—	$847,085
18	$4,677.56	$56,131	−$676	$897,235	—	$897,235
19	$4,817.89	$57,815	−$2,022	$949,046	—	$949,046
20	$4,962.42	$59,549	−$3,410	$1,002,579	—	$1,002,579
21	$5,111.29	$61,336	−$4,838	$1,057,896	—	$1,057,896
22	$5,264.63	$63,176	−$6,310	$1,115,060	—	$1,115,060
23	$5,422.57	$65,071	−$7,826	$1,174,138	—	$1,174,138
24	$5,585.25	$67,023	−$9,387	$1,235,199	—	$1,235,199
25	$5,752.81	$69,034	−$10,995	$1,298,316	—	$1,298,316