Oakwyn Realty Ltd.

Should You Rent or Buy?

Compare the true cost of renting versus buying over time. Factor in equity growth, opportunity cost, and your local market to find the smarter financial move.

How the Rent vs Buy Calculator Works

The rent vs buy decision is more than just comparing a mortgage payment to monthly rent. Our calculator models both scenarios over your chosen time horizon, accounting for the opportunity cost of capital— the returns a renter could earn by investing their down payment and monthly savings in the stock market instead of tying them up in a home.

On the buying side, the tool tracks mortgage payments, property taxes, and maintenance costs, while crediting you with home equitythat grows through both principal paydown and annual appreciation. On the renting side, it compounds the difference in monthly costs at your chosen investment return rate, building a hypothetical portfolio that represents the renter's alternative wealth.

The break-even pointis the year when the buyer's net wealth (home equity minus total costs) overtakes the renter's net wealth (investment portfolio minus total rent paid). A shorter break-even period favours buying; a longer one suggests renting may be the better short-term strategy. Adjust the inputs to match your Canadian market and personal financial situation for the most accurate comparison.

Frequently Asked Questions

Is it better to rent or buy a home?
It depends on your financial situation, how long you plan to stay, and local market conditions. Buying builds equity over time but comes with upfront costs (down payment, closing costs) and ongoing expenses (maintenance, taxes). Renting offers flexibility and lower upfront costs, and lets you invest the savings elsewhere. This calculator models both scenarios so you can see which comes out ahead for your specific inputs.
How is the break-even point determined?
The break-even point is the year when the buyer's total net wealth (home equity minus all ownership costs) overtakes the renter's total net wealth (investment portfolio grown from the down payment and monthly savings). Before this point, renting is financially advantageous; after it, buying pulls ahead. A typical break-even is 5 to 7 years, but it varies widely based on home appreciation, rent increases, and investment returns.
What costs are included in the buying scenario?
The buying scenario includes: mortgage payments (principal and interest), property taxes, home insurance, maintenance costs (typically 1% of home value per year), and closing costs. It credits the buyer with equity built through principal paydown and home appreciation. The net result is your total wealth after selling the home and paying off the remaining mortgage.
Does the calculator account for investment returns on savings?
Yes. The renting scenario assumes you invest your down payment and the monthly difference between ownership costs and rent in a diversified portfolio. You set the expected annual return (default 7%). This opportunity cost is the key factor that makes renting competitive — the renter's portfolio compounds over time, offsetting the buyer's equity gains.
How does home appreciation affect the rent vs buy decision?
Home appreciation is the single largest variable in the calculation. Higher appreciation favours buying because your equity grows faster. Lower appreciation (or depreciation) favours renting because the buyer's wealth grows more slowly while the renter's investment portfolio keeps compounding. Try adjusting the appreciation rate to see how sensitive the result is to this assumption.