Rent vs Buy Calculator

How the Rent vs. Buy Calculator Works

What the Calculator Measures

The rent vs. buy calculator compares two running totals year by year: the total cost of owning a home (mortgage interest, property taxes, insurance, maintenance, and upfront closing costs) against the total cost of renting (monthly rent paid, plus the investment returns you could have earned on your down payment and any monthly savings). The year the ownership total drops below the renting total is your break-even year.

The minimum down payment in Canada on a $650,000 home is $40,000 — 5% on the first $500,000 and 10% on the remaining $150,000 — under CMHC rules effective December 15, 2024 (CMHC, Dec 2024).

The Break-Even Formula Explained

A $650,000 home in Ontario at 3% annual appreciation and a 5.09% mortgage rate typically breaks even vs. renting in approximately 6 years, assuming $2,800/month equivalent rent and a 10% down payment.

1. Add up your total monthly ownership cost: mortgage principal + interest, property taxes (~$433/month on a $650K Ontario home), home insurance (~$150/month), and maintenance (1% of home value per year, or ~$542/month).
2. Find the equivalent monthly rent for a comparable home in your neighbourhood.
3. Each year you own, subtract the equity you build from mortgage principal paydown and home appreciation.
4. The year your cumulative ownership costs dip below cumulative renting costs is your break-even year.
5. For a $650,000 Ontario home at 3% annual appreciation and a 5.09% rate, break-even typically lands in year 6.

How to Use This Calculator

1. Enter your home price and down payment. Type the purchase price of the home you are comparing. Then enter your down payment as a dollar amount or percentage. The calculator applies Dec 2024 CMHC rules automatically: 5% minimum on the first $500,000, and 10% on the amount over $500,000 when the price is under $1,500,000. If your down payment is below 20%, CMHC mortgage insurance is added to your loan balance automatically. (CMHC, Dec 2024 rules)
2. Set your mortgage rate and amortization period. Enter the annual mortgage rate you expect to pay. If you have not yet been pre-approved, check the Bank of Canada's current 5-year benchmark at bankofcanada.ca as a baseline. Set your amortization period: 25 years is standard for insured mortgages; 30 years is available for uninsured mortgages as of December 2024. (Bank of Canada; OSFI B-20, 2024)
3. Enter the equivalent monthly rent. Enter the monthly rent for a comparable home in the same neighbourhood — same number of bedrooms and roughly the same square footage as the home you are considering buying.
4. Adjust appreciation and investment return assumptions. Set the annual home price appreciation rate. Statistics Canada data shows Canadian residential property appreciated at an average of approximately 3–4% annually over the long run, though local markets vary significantly. Also set the investment return rate — what a renter could earn by investing the down payment and monthly savings instead of buying. (Statistics Canada, statcan.gc.ca)
5. Read your break-even year and net worth comparison. The calculator outputs two numbers: your break-even year and a net worth comparison projecting both paths over 25 years. If your break-even year is earlier than how long you plan to stay in the home, buying is the stronger financial choice under your assumptions.

Key Inputs — What to Enter and Why

Home Price, Down Payment, and Closing Costs

Your home price and down payment are the two biggest drivers of your break-even year. Under the December 2024 CMHC rules, the minimum down payment on a $650,000 home is $40,000 — 5% on the first $500,000 ($25,000) and 10% on the remaining $150,000 ($15,000). The minimum down payment calculator shows the exact amount for any home price. Budget an additional 1.5–4% of your purchase price for closing costs. Use the closing cost calculator for a full breakdown.

Source: CMHC (cmhc-schl.gc.ca, accessed April 2026)

Mortgage Rate, Amortization, and the Stress Test

Canadian buyers pass the OSFI mortgage stress test at the higher of their contract rate plus 2 percentage points, or the 5.25% floor, regardless of whether the mortgage is insured or uninsured. If your contract rate is 5.09%, you must qualify at 7.09%. Enter your expected contract rate — not the qualifying rate. Use the mortgage payment calculator to model monthly payments at different rates and amortization periods.

Monthly Rent, Appreciation Rate, and Investment Return

Use the current asking rent for a comparable home — not what you currently pay if your lease is below market. For appreciation, Statistics Canada data shows Canadian residential property appreciated at an average of approximately 3–4% annually from 2000 to 2023, though individual markets ranged from 1.5% to over 6% per year. The investment return rate is the assumed annual return a renter earns by investing the down payment and monthly savings instead of buying.

How to Read Your Results

The Break-Even Year

The break-even year is the year when cumulative ownership costs equal cumulative renting costs. Before that year, renting has cost you less in total. After that year, buying has cost you less. In Canada's major cities, break-even typically falls between 4 and 8 years. High-price markets like Toronto and Vancouver often see longer break-even timelines of 7–10 years depending on appreciation and price-to-rent ratios.

The practical rule: if your break-even year is earlier than how long you plan to stay in the home, buying is the stronger financial choice under your assumptions. If you plan to move before break-even, renting and investing the difference is likely to leave you further ahead.

Net Worth Comparison Over Time

The calculator projects two net worth paths over 25 years: the homeowner path (home equity minus remaining mortgage balance, growing with appreciation) and the renter path (down payment invested plus monthly savings invested, compounding at the assumed investment return rate). Renters who consistently invest the difference between rent and ownership costs can match or exceed homeowner net worth over 10 or more years at 3% appreciation.

Renting vs. Buying in Canada — 2026 Rules That Affect Your Calculation

Three Canadian policy changes directly affect calculator outputs in 2026. Using outdated figures — many competing calculators still quote pre-December 2024 rules — will produce the wrong break-even year.

CMHC insurance expanded to homes under $1.5M (December 15, 2024). Buyers of homes priced from $1M up to below $1.5M can access insured mortgages with less than 20% down, reducing cash needed up front and changing the rent-vs-buy math in higher-price markets.

OSFI stress test floor remains at 5.25%. Canadian buyers pass the OSFI mortgage stress test at the higher of their contract rate plus 2 percentage points, or the 5.25% floor. Enter your contract rate into the calculator.

Amortization: 25 years (insured) vs. 30 years (uninsured). Insured mortgages are capped at 25-year amortization. Uninsured mortgages can extend to 30 years as of December 2024.

For a broader view of the 2026 Canadian housing market, see our analysis: should you buy a house in Canada in 2026.

Sample Calculation: A $650,000 Home in Ontario

An Ontario buyer is comparing a $650,000 home with a 10% down payment against renting a comparable property for $2,800/month. Under the December 2024 CMHC blended rule, 10% down on $650,000 is $40,000 — 5% on the first $500,000 ($25,000) and 10% on the remaining $150,000 ($15,000).

Source: CMHC (cmhc-schl.gc.ca, Dec 2024); OSFI B-20 (osfi-bsif.gc.ca)

Changing the appreciation rate from 3% to 2% pushes break-even to approximately year 8, while a rate increase from 5.09% to 5.59% adds roughly half a year. These sensitivities are why the calculator exposes both sliders.

When Buying Makes Sense (and When Renting Wins)

Buy when you plan to stay 6 or more years, your debt ratios pass the OSFI stress test, you have a minimum down payment saved plus 2–4% for closing costs, you have stable income, and your local market has shown consistent appreciation of at least 2% annually. The equity you build through mortgage principal paydown alone becomes significant after year 4.

Rent when your timeline is under 4 years, the price-to-rent ratio in your city is above 25, or you need flexibility for a job change, family transition, or planned move. For a deeper analysis, read the complete rent vs. buy guide for Canada.

Frequently Asked Questions

Sources

• Canada Mortgage and Housing Corporation (CMHC). Mortgage Loan Insurance. FCAC home buying costs guide. Accessed April 2026.
• Office of the Superintendent of Financial Institutions (OSFI). Residential Mortgage Underwriting Practices and Procedures (B-20). osfi-bsif.gc.ca. Accessed April 2026.
• Bank of Canada. Canadian Interest Rates and Monetary Policy Variables. bankofcanada.ca. Accessed April 2026.
• Statistics Canada. Residential Property Price Index. statcan.gc.ca. Accessed April 2026.

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