Rent vs Buy in Canada: The Decision Guide Behind the Calculator
Run the dollars at rent versus buy. Do not treat this guide as a second calculator. The mortgage contract around a purchase is the Canadian mortgage guide. Cash due on top of the down payment is the closing cost guide. A down payment under 20 percent usually adds a premium the calculator does not: the CMHC guide. If the "buy" case is a rental, stop. Interest may be deductible and the principal residence exemption may not. That file is primary residence versus rental.
- The existing calculator compares ending wealth. It does not look up your city's rent, tax, or this month's discounted mortgage rate. Two of its labelled illustrations finish on opposite sides of zero. The assumptions did that. This page does not reprint those outputs.
- The inputs that move the sign are the years you will stay, appreciation, selling costs, the after-tax return on the renter's portfolio, and whether a CMHC premium belongs on the loan.
- A lower monthly payment is not a reason to buy. Principal is savings. Property tax, maintenance, and insurance are not. The renter keeps the down payment invested.
- A principal residence is often sheltered when you sell. A non-registered portfolio is not. If the renter's money would sit in a TFSA, type the pre-tax return you believe. If it would not, type an after-tax return. The tool will not compute the tax.
- No national "buying wins" figure belongs on this page. There isn't a sourced one that survives a change of city, stay, and rate.
Which question is the calculator answering?
The tool's own description is ending wealth. On the owner side that is the home, minus selling costs, minus the mortgage left. On the renter side it is the portfolio that started as the down payment plus buying costs, then grew or shrank by the monthly gap between owning and renting. A comparison of this month's rent with this month's mortgage payment ignores the principal, the down payment, and the cheque to the lawyer. People who "save" by buying are often just moving cash into a wall. That can be the right life. It is not, by itself, a higher net worth.
Open the calculator after you have written down a price, a down payment, a contract rate from a written commitment or a rate you are explicitly assuming, a stay you will actually live, and a selling cost you have checked with a listing conversation. If you cannot write the stay, you do not have a result. You have the loaded example.
Which assumptions flip the sign?
| Assumption | Why it moves ending wealth | What this page will not do |
|---|---|---|
| Years you will stay | Selling costs land at the end. A short stay makes them dominate a home that has not appreciated for long. | Publish a minimum stay that "always" wins. Run your own years in the tool. |
| Appreciation | The mortgage does not shrink when the price does. A decline hurts the owner more than the percentage, because of leverage. | Print a Canadian average house-price increase and call it your house. Type zero, and a negative, before you treat the first run as a decision. |
| Selling costs | Commission and legal fees come off the ending value. They vary by city and by how you sell. | Treat a round 5 percent as a law. It is a modelling default on the calculator page, labelled as such. |
| Return on the difference | The renter's portfolio compounds. A TFSA can take a pre-tax return. A taxable account cannot. | Assume a balanced fund's long-run average. If you would leave the down payment in savings, type the savings rate. |
| CMHC and closing costs | Under 20 percent down, the premium is borrowed and added to the mortgage. Land transfer tax is cash on top, and it is provincial. | Add the premium inside the calculator. It is not in the tool. Add it to the loan, or to buying costs, yourself. The schedule is the CMHC guide. |
| Maintenance and special assessments | A smooth percent of value hides a roof, a special assessment, or a condo fee the rent already includes. | Call 1 percent a building standard. Put the irregular bill into the maintenance input or into the rent you are comparing against. |
Table as of October 2026. It describes the calculator's structure and CMHC's published role when the down payment is under 20 percent. It is not a market study. FCAC's mortgage pages are the consumer frame for the loan itself. They do not contain a rent-versus-buy winner.
What should you leave out of the victory lap?
The principal residence exemption often shelters a gain on the home you live in. The renter's non-registered portfolio does not get that shelter. If you ignore tax, you bias the comparison toward renting whenever the portfolio's return is typed pre-tax. If you ignore the exemption, you bias it toward buying by pretending the owner pays tax on the sale. Write down which one you are doing. The exemption's traps, including a change of use, are not calculated here. They are the principal-residence pages on this site and on CRA.
Mobility is not in the tool. A job that might move you in three years is a short stay, which you can type. A school, a parent you are caring for, or a lease that ends in a city with no vacancy is a reason to buy or to rent that the wealth number will not capture. Write that reason beside the result. A negative wealth gap can still be the right house. The frame's job is to stop you from calling it an investment win.
The tool does not deduct interest and does not charge capital gains. A rental can deduct interest when the money was borrowed to earn rental income, and it can face capital gains and CCA recapture on a sale. Those rules are the rental deductions guide. Running a principal-residence calculator on a duplex and calling the output a cap rate is the wrong file.
A sequence that keeps the two pages distinct
- Write the stay, the city, and whether anyone will need to move for work. If the stay is a hope, say so.
- Price the down payment you will actually have, including whether it is under 20 percent. If it is, open the CMHC schedule before you open the calculator.
- Look up land transfer tax for the province and the city. Put that dollar in buying costs. The closing-cost guide is the map. Do not reuse a placeholder.
- Get a contract rate in writing, or label the rate you type as an assumption. The mortgage guide's 4.50 percent illustrations are assumptions. They are not an offer.
- Type the renter's return after the tax the account would actually pay. TFSA room is the TFSA contribution guide.
- Run the calculator. Then change appreciation to zero and cut the stay in half. If the decision only works on the first run, you do not have a decision.
Frequently asked questions
Why isn't the calculator on this page?
It already lives at rent versus buy, with its own inputs and its own labelled illustrations. Putting a second copy here would split the tool and invite two different "answers." This page tells you what to type and what the tool omits. Then you use that page.
Is a lower mortgage payment than the rent a reason to buy?
No. The owner's cash includes principal, which builds equity, and also tax, maintenance, insurance, and the down payment, which the payment comparison skips. The calculator exists because that shortcut fails in both directions. Sometimes the owner still finishes ahead. The payment is not how you find out.
Should I use the national average appreciation?
Only if you are willing to bet the down payment that your house, in your years, matches a national series. This page does not publish that series. Appreciation is an input. Run a number you can defend, and a number you would hate.
Where do CMHC premiums go?
Into the loan, if you roll the premium in, which raises the balance the calculator should start with. The provincial sales tax on the premium, in Ontario, Quebec, and Saskatchewan, cannot be added to the loan on CMHC's page. That tax is cash, so it belongs with buying costs. The calculator does not do this for you.
What return should the renter type?
The after-tax return you would actually earn on that down payment for the years you would rent. A TFSA can take the pre-tax return. A taxable account should take a lower number. A savings account should take the savings rate. Five percent is not a requirement. It is not even an input this page is willing to bless.
Does buying hedge inflation?
A fixed-rate mortgage payment does not rise with rent during the term. Property tax, insurance, and maintenance can still rise. The rent input in the calculator has its own growth rate, which you type. Inflation is not a reason to skip the selling-cost line. At the end of the term the rate resets. The renewal guide is that date.
Sources
- Rent versus buy calculator — the ending-wealth arithmetic this guide refuses to duplicate.
- FCAC: mortgages
- CMHC: when a premium exists, and that provincial sales tax is not added to the loan
- Land transfer tax and closing costs
The sign on the comparison is only as good as the stay and the tax.
Interest on the home you live in is not deductible. The filing side of a move or a sale is the 2026 tax guide.
Get the 2026 Tax Guide — $49 CAD
