Rent vs. Buy Calculator

Rent vs. Buy: Making the Biggest Financial Decision of Your Life

The rent vs. buy decision is one of the most consequential financial choices you'll make. Contrary to popular belief, buying isn't always better than renting. The right answer depends on your local market, how long you plan to stay, and what you'd do with your money otherwise. Our Rent vs. Buy Calculator helps you run the numbers objectively.

The True Cost of Homeownership

The monthly mortgage payment is just the beginning. Homeownership costs include property taxes (0.5-2.5% of home value annually), homeowner's insurance, maintenance and repairs (budget 1-2% of home value per year), HOA fees, closing costs (2-5% at purchase), and eventually selling costs (5-6% in realtor commissions). These "hidden" costs often add 40-60% on top of your mortgage payment.

The Hidden Power of Renting

Renters who invest the money they'd otherwise spend on a down payment, maintenance, and the difference between owning costs and rent can build significant wealth. If you'd put a $70,000 down payment into an S&P 500 index fund averaging 7-10% annually, it could grow substantially over a decade. The key is actually investing the difference — not spending it.

When Buying Makes Sense

You plan to stay 5+ years: The longer you stay, the more you benefit from equity and appreciation. Your local rent-to-price ratio favors buying: If annual rent divided by home price exceeds 5%, buying may be cheaper. You want stability and control: Owning gives you fixed costs (with a fixed-rate mortgage) and freedom to customize. Canada-specific: Principal residence gains are completely tax-free in Canada, making homeownership particularly tax-advantaged.

When Renting Makes Sense

You might move in 1-3 years: Transaction costs of buying and selling make short-term ownership expensive. Your local market is overpriced: In cities like Vancouver, Toronto, San Francisco, or New York, the math often favors renting. You value flexibility: Career changes, relationship shifts, or lifestyle preferences may make renting the smarter choice. You can invest the difference: If you're disciplined about investing what you save by renting, you can build comparable or greater wealth.