Rent vs Buy Calculator
A fair, symmetric comparison for Canada, the buyer builds home equity while the renter invests the down payment and every dollar of cost difference. Semi-annual mortgages, CMHC insurance and the principal-residence exemption are all built in.
Rates & rules verified · July 2026Primary sources: OSFI – Guideline B-20 (mortgage underwriting) · CMHC – Mortgage loan insurance · FCAC – Down payment requirements · CRA – Tax rates and income brackets
Net worth: buying vs renting
Net worth if you sold (buying) or cashed out (renting) at the end of each year, after selling costs and tax. Where the two lines cross is your breakeven.
Who comes out ahead, by home price growth and investment return
Buyer's net worth minus renter's at the end of your horizon, re-run for nearby home price growth and investment returns with every other input at your numbers.
Monthly cash in year 1: owning vs renting
Average monthly cash each side spends in the first year. The principal part of the mortgage payment is shown on its own, since it stays yours as home equity.
What each side walks away with
At the end of your horizon: the home's value less the mortgage still owing and selling costs, next to the renter's portfolio after tax.
Year-by-year detail
Net worth if you sold at the end of each year. The highlighted row is the breakeven year.
| Year | Home value | Mortgage bal. | Buyer net worth | Renter net worth | Advantage |
|---|
How this is calculated
A symmetric comparison
Most rent-vs-buy calculators favour one side. This one treats both fairly. On day one the renter invests exactly the cash a buyer ties up, the down payment + upfront costs (and any CMHC sales tax). Then every year we compute both sides' total cash cost and invest the difference: when owning costs more, the renter invests that gap; when renting costs more (common late in a mortgage), the excess is credited to the buyer's side instead. Neither side gets a free ride.
Buyer net worth (year by year)
net worth = home value − mortgage balance − selling costs + invested surplus. Selling costs are realtor% × sale price + legal. There is no capital gains tax on the home. Canada's Principal Residence Exemption makes the entire gain tax-free.
Renter net worth (year by year)
net worth = investment value − capital gains tax. In a non-registered account, gains are taxed on 50% of the gain (the 2026 inclusion rate) at your capital gains rate. Flip on the TFSA switch and those gains become tax-free.
Canadian mortgage math
Fixed rates compound semi-annually, so the effective monthly rate is (1 + rate/2)^(1/6) − 1. Below 20% down, CMHC default insurance (0.60%–4.00% of the loan by loan-to-value, +0.20% for an insured 30-year amortization) is added to the mortgage; its provincial sales tax in ON, QC, SK and MB is paid in cash at closing. Homes of $1.5M+ need 20% down and can't be insured. An insured (under-20%-down) mortgage is limited to a 25-year amortization unless you're a first-time buyer or buying new construction, when 30 years is allowed (federal rule, in force December 15, 2024), toggle First-time buyer or new build under More assumptions. Payments stop counting once the mortgage is paid off.
Reading the charts
Net worth. Each point is what each side would have if the buyer sold and the renter cashed out at the end of that year, on the after-tax basis above. Year 0 is selling right after closing: price − mortgage (incl. any CMHC premium) − selling costs for the buyer, against the renter's untouched day-one cash. The shading between the lines is green where buying is ahead and blue where renting is ahead, and the marks show the breakeven year and any later change of lead. With a high-ratio mortgage, leverage can put buying ahead early and a renter's portfolio can compound past the house once the mortgage is paid off, so the lead can change hands more than once.
Who comes out ahead. Each cell re-runs the whole model with home appreciation and investment return moved in whole-point steps around your figures (kept within each field's limits), every other input unchanged. Cells show buyer minus renter net worth at your horizon; the outlined cell is your own scenario and equals the headline result. These are fixed what-if rates, not a forecast or a probability.
Monthly cash in year 1. The average of the first 12 months. The mortgage payment is split into interest = balance × monthly rate and principal (the rest of the payment), month by month on the semi-annual compounding schedule. Principal is not a cost: it reduces what you owe and comes back to you as equity when you sell, which the net-worth chart counts. Renting shows rent plus renter's insurance and utilities.
What each side walks away with. home value − mortgage owing − selling costs + invested savings − tax on those savings = buyer's net worth, the same figure as the headline. Selling costs are your realtor commission plus $1,500 for legal fees on the sale.
Costs grow over time
Property tax, insurance, utilities and renter costs inflate each year; maintenance is a percentage of the current (appreciated) home value, not the original price; and rent grows at your rent-increase rate.
What this doesn't model
The breakeven year is measured on the same after-tax basis as the verdict: the renter's taxable investment gains to date are netted out before the two sides are compared, so the crossover matches the headline result instead of flattering the buyer with a pre-tax comparison. Not modelled: land transfer tax as a separate line (fold it into upfront costs, or use the land transfer tax calculator), rate changes at renewal, moving between rentals, the emotional value of owning, or leverage risk if prices fall. Pair this with the mortgage calculator and affordability calculator for the full picture. Assumptions use FP Canada and CMHC/OSFI figures verified July 2026.
Common questions
Is it better to rent or buy a home in Canada in 2026?
It depends on how long you stay, how fast homes appreciate versus what your investments earn, and your carrying costs. This calculator runs a symmetric year-by-year model: the buyer builds home equity while the renter invests the down payment plus every dollar of cost difference. Buying tends to win over long horizons (10+ years) and when appreciation beats your investment return; renting wins over short horizons and when high mortgage rates, condo fees and property tax make owning expensive.
Do I pay capital gains tax when I sell my home in Canada?
No. Your principal residence is exempt from capital gains tax under the Principal Residence Exemption, so the entire gain on your home is tax-free. This calculator applies that exemption to the buyer. The renter's investment gains, by contrast, are taxed in a non-registered account at your capital gains rate on 50% of the gain, unless you hold them in a TFSA, which you can toggle on.
What does 'invest the difference' mean in a rent vs buy comparison?
A fair comparison assumes the renter invests the money a buyer ties up: the down payment and closing costs on day one, plus every year the difference between owning costs and renting costs. When owning costs more, the renter invests that gap; when renting costs more, the excess is credited to the buyer's side instead. Both sides are treated symmetrically.
Why is the down payment counted against buying?
The down payment and closing costs are cash you could have invested. In this model the renter invests that lump sum at your assumed return, so buying only wins if the home equity you build (appreciation plus principal paydown, minus selling costs) beats what that invested cash would have grown to.
How is the breakeven year calculated?
The breakeven year is the first year on your horizon where the buyer's net worth, home equity after estimated selling costs plus any invested surplus, exceeds the renter's net worth. Both sides are compared on the same after-tax basis as the headline verdict: the renter's non-registered investment gains accrued to that year are taxed (unless held in a TFSA), so the crossover you see in the table and chart is exactly the point where owning gets ahead after tax. Before that year, selling would leave you behind renting; after it, buying pulls ahead. If the curves never cross within your horizon, there is no breakeven and renting wins for that period.