Rent or Buy? The Honest Canadian Calculator
Buying builds equity. Renting and investing the difference can too. The gap between the two paths is smaller than most people expect, and smaller still than most real estate agents will tell you. Run the real numbers for your situation.
Your Scenario
Adjust any field. Results update instantly.
The Home
No CMHC required
The Mortgage
Canadian mortgages use semi-annual compounding per the Interest Act.
The single biggest driver of the buy vs. rent outcome. Shorter = renting tends to win.
The Rental Alternative
Guideline in most provinces is 2–3%. Rent-controlled units may be lower.
Long-run historical return for an equity-oriented portfolio. FP Canada's forward-looking Projection Assumption Guidelines are more conservative: ~5.3% for a 60/40 balanced blend, ~6.0% for an 85/15 growth blend. 7.0% is appropriate for near-100% equity over a long horizon. Gross of fees; your net will be lower by your MER.
Renting and investing the difference leaves you $189,351 ahead in net worth after 10 years.
Buying does not overtake renting within your 10-year window.
- Buyer
- Renter
Why the answer is rarely as obvious as people assume
What buying has going for it
Leverage amplifies gains in rising markets. Forced savings through principal payments. Protection from rent increases. Freedom to renovate. Long-term stability. In many Canadian cities, buyers who held for 10 or more years have done very well.
What renting has going for it
Flexibility. Lower transaction costs. No maintenance bills. The ability to invest the down payment and monthly savings. Research from the Bank of Canada and academic economists consistently finds that renting and investing the difference produces comparable long-run wealth in many scenarios.
The factors that matter most
How long you stay. What the home appreciates at. What you'd earn investing instead. Your local property tax rate. The ratio of rent to purchase price in your market. These five numbers matter far more than the conventional wisdom that "buying is always better."
What this calculator does differently
Most rent vs. buy tools show you the buyer's equity and stop there. This one includes the opportunity cost of the down payment, the full cost of owning (interest, tax, maintenance, insurance), and province-specific land transfer tax. Both sides are modelled honestly.
How the math works
Canadian mortgage compounding
Canadian mortgages compound semi-annually by law (the Interest Act). The nominal annual rate you're quoted is a semi-annual rate. This calculator converts it to an effective monthly rate using: monthly rate = (1 + nominal/2)^(1/6) − 1. Most American-built calculators get this wrong.
CMHC mortgage insurance (2026)
Premiums: 4.00% (5–9.99% down), 3.10% (10–14.99%), 2.80% (15–19.99%), 0% (20%+ or homes over $1.5M). As of December 15, 2024, the minimum down payment for homes $500K–$1.5M is $25,000 plus 10% of the amount above $500,000.
Land transfer tax
Calculated using 2026 rates for Ontario, BC, Quebec, Manitoba, New Brunswick, Nova Scotia, and PEI. Alberta, Saskatchewan, Newfoundland and Labrador, and the three territories have no provincial land transfer tax (only nominal title registration fees). First-time buyer rebates are applied where available.
Opportunity cost and investment return
The renter's portfolio starts with the down payment invested from day one. Each month, if buying costs more than renting, the renter also invests that monthly surplus. Upfront buying costs (land transfer tax, CMHC PST, legal fees) are deducted from the buyer's net worth since they are cash permanently spent at closing. FTB rebates reduce this deduction and directly improve the buyer's net worth figure. The investment return default of 7.0% reflects long-run historical returns for an equity-oriented portfolio. FP Canada's forward-looking Projection Assumption Guidelines are more conservative: approximately 5.3% for a 60/40 balanced blend and 6.0% for an 85/15 growth blend.
Selling costs
The buyer's net worth at the time horizon includes a deduction for selling costs (default 5%), which typically includes real estate commissions (~3–5%), legal fees, and moving costs. This is one of the most commonly omitted costs in buy vs. rent analyses.
What is not modelled
Mortgage renewal risk at higher rates. FHSA or RRSP Home Buyers' Plan benefits. Income tax on investment gains (non-registered account). Capital gains tax on home sale above the principal residence exemption. Rental income. These are known limitations of a general-purpose calculator.
Rent vs. buy in Canada: the questions worth asking
This calculator is for educational purposes only and does not constitute financial or real estate advice. Projections are illustrative. Past home price appreciation does not guarantee future results. Consult a licensed financial planner or mortgage broker before making any purchase or investment decision.
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