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Rent vs. buy calculator
Compare the true long-term cost of buying versus renting. This calculator accounts for appreciation, rent increases, opportunity cost on your down payment, and transaction costs on both sides.
Your scenario
How this calculator works
Most rent-vs-buy calculators compare mortgage payments to rent. That's too simple. The real question is: what does each path cost in total, and what is your net financial position at the end of the period?
What the buying costs include
Mortgage principal and interest over the period. Property tax (estimated at 1% annually). Home insurance (estimated at 0.5% annually). Maintenance (estimated at 1% annually, standard rule of thumb). Closing costs on purchase (estimated at 1.5% of purchase price, covering legal fees, land transfer tax, title insurance, and adjustments). Selling costs at the end of the period (estimated at 4% of future sale price, covering agent commission and legal costs). The opportunity cost of the down payment: what that money could have earned if invested instead (assumed at 5% annually).
What the renting costs include
Monthly rent, compounded by the annual rent increase. Renter's insurance (estimated at $25/month). Investment returns on the down payment amount: the renter invests the down payment equivalent at 5% annually, which accumulates as a wealth position against the buyer's home equity.
Why the break-even point matters
Buying is expensive to enter and expensive to exit. Transaction costs on both sides eat into returns in the short term. Over long periods, appreciation typically makes buying the stronger wealth position in Canadian markets. The break-even year is the point at which total buyer wealth (home equity minus remaining mortgage, minus selling costs) exceeds total renter wealth (invested down payment plus ongoing rent savings). It's rarely year one or two, and it varies significantly by market.