With the default inputs, buying an $850,000 home beats renting a similar one for $3,200 a month by $27,678 after ten years. But renting stays ahead until year 8, so if you leave sooner or tweak a single assumption, the answer flips.
What is the calculator actually comparing?
Two piles of wealth. The buyer’s pile is the home’s value minus what’s left on the mortgage and the cost of selling. The renter’s pile is an investment account that starts with the down payment and the buying costs they didn’t spend, then grows with whatever the cheaper option saves each month.
Owning usually costs more per month at first. In the default case the mortgage payment alone is $3,801.51, and once tax, upkeep and the rest go in, owning runs $5,005.68 in year 1 against $3,200 in rent. The renter invests the $1,805.68 gap. The buyer’s extra spending is a bill the home’s equity has to earn back.
Which defaults does it start with?
| Input | Default | Effect |
|---|---|---|
| Home price and down payment | $850,000 and $170,000 | Sets the mortgage of $680,000 |
| Mortgage rate and amortization | 4.6% and 25 years | Payment of $3,801.51 |
| Yearly home price growth | 3% | Raises buyer equity |
| Yearly rent increase | 2.1% | Raises the renter’s costs |
| Property tax and upkeep | 0.7% and 1% of price | Cost of owning |
| Buying and selling costs | 3% and 5% | One-time drag on the buyer |
| Return on invested savings | 5% | Growth of the renter’s pot |
Who wins after ten years?
Run the defaults. The buyer finishes with $590,150 once part of the loan is paid off and selling costs are covered. The renter finishes with $562,472 in investments. Buying wins by $27,678, though only from year 8, when the buyer’s total of $483,852 passes the renter’s $479,837. Through years 1 to 7, the renter is ahead.
Now move one input at a time. Push the investment return to 7% and renting wins by $66,302. Cut yearly home price growth to 1% and renting wins by $158,602, because the buyer’s total sinks to $396,920. Drop the comparison rent to $2,600 and renting wins by $73,354. So the result hangs on a handful of guesses, and nobody knows any of them.
Where do people go wrong?
The classic slip is setting the mortgage payment beside the rent and stopping there. That leaves out property tax, repairs, condo fees and whatever the down payment could have earned elsewhere. The calculator counts all of it.
Use a real listing for the rent, too, not a guess. And compare like with like: a smaller place to rent than the one you’d buy tilts the result before you’ve started.
The model runs on steady yearly rates, and real prices and markets don’t move that neatly. It leaves out income tax on investment gains and any tax on a home sale. It also can’t put a price on what each side gets. Buyers get stable housing costs and freedom to renovate. Renters get flexibility.
What should you check next?
See what a loan would really cost with the mortgage calculator, and how much cash you’d need up front with the down payment calculator. If your rent is about to go up, the rent increase calculator shows the legal maximum in your province. First-time buyers can also try the FHSA calculator for building the deposit.
Where the numbers come from
The mortgage payment comes from the same engine as the mortgage calculator on this site. The other defaults are planning figures, so swap in your own, since price growth, rent growth and investment return can’t be known in advance. This website has no link with any government body, and the result is an estimate, not advice.
Frequently asked questions
Is it cheaper to rent or buy?
Month to month, renting costs less in the default case: $3,200 against $5,005.68 for owning in year 1. Buying can still come out ahead after ten years.
When does buying pull ahead?
In year 8 with the defaults. A shorter stay, slower price growth or a higher investment return pushes that date back.
Does the renter invest the down payment?
Yes. The renter invests the down payment, the buying costs they saved, and whatever the cheaper option frees up each month.
Which input changes the result most?
Home price growth. At 1% a year renting wins by $158,602, while at 3% buying wins by $27,678.
Does it count tax on investment gains?
No. Income tax on investment returns and any tax on a home sale are left out.
Sources and updates
Updated: . How we check rates · Editorial team · Updates
Estimate only. These figures are a planning estimate, not tax, legal or accounting advice. Tax-Services.ca is an independent publisher: we don't prepare or file tax returns, and we don't offer tax, legal or accounting services. We have no connection with the Canada Revenue Agency, Revenu Québec or any provincial government. Your real amounts depend on details this tool cannot see, so confirm them with an official source or a qualified professional before you act.