Rent vs buy calculator
“Renting is throwing money away” is only true sometimes. This compares your actual net worth either way — including the down payment a renter would invest instead — and shows the year buying pulls ahead.
Home value after selling costs, minus what you still owe
Down payment + monthly savings, invested
Renting stays ahead the whole 10 years at these assumptions. The renter's invested down payment compounds faster than the home builds equity — try a longer horizon or higher appreciation to see it flip.
Assumes property tax 1%, maintenance 1% and insurance 0.4% of home value per year, closing costs of 1.5% and selling costs of 5%. The renting scenario assumes you actually invest the down payment and any monthly difference — which is the part most people skip.
Buying wins when you stay long enough for equity and appreciation to outrun the transaction costs (land transfer tax on the way in, ~5% commission on the way out) and the investment returns a renter would earn on the down payment. In most Canadian markets that break-even lands around 5–10 years.
The comparison people get wrong
Most rent-vs-buy arguments compare rent against a mortgage payment. That's not the real comparison. A mortgage payment builds equity, so part of it isn't a cost at all — while property tax, maintenance, insurance and mortgage interest genuinely are. And on the other side, a renter who invests the down payment has an asset compounding too. This calculator models both sides properly: owner equity after selling costs, versus a renter's invested portfolio.
Frequently asked questions
Is it better to rent or buy in Canada?
It depends almost entirely on how long you stay. Buying carries large one-time costs — land transfer tax, legal fees, and roughly 5% in commission when you sell — so it usually takes several years of equity building and appreciation to come out ahead. Staying under about five years, renting and investing the down payment often wins.
Why does this calculator invest the down payment?
Because that's the honest comparison. A renter isn't just avoiding a mortgage — they also have a large sum they didn't tie up in a house. If you don't actually invest that money the comparison collapses, which is why owning wins for most people in practice: it forces the saving.
What is the break-even point on buying a home?
The year your net position as an owner overtakes what you'd have from renting and investing. In most Canadian markets it lands somewhere around five to ten years, but it's highly sensitive to appreciation, your mortgage rate, and the gap between rent and carrying costs.
What costs do owners forget?
Property tax, maintenance, home insurance, and condo fees. A useful rule of thumb is about 1% of the home's value per year for maintenance and another 1% for property tax — on a $700,000 home that's roughly $1,150 a month before the mortgage.
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Researching and writing about Canadian personal finance since 2026.
Last reviewed August 2026 · How we research
“Rent vs Buy Calculator (Canada) — VaultNerd” — VaultNerd, https://www.vaultnerd.com/tools/rent-vs-buy-calculator, updated August 2026.
- Standard rent-vs-own net position modelling (equity after selling costs vs invested alternative)
- Typical Canadian carrying-cost assumptions: 1% property tax, 1% maintenance, 0.4% insurance