What costs does your Rent vs Buy calculator include?

For buying, we include: mortgage payments, stamp duty/transfer tax, maintenance costs (estimated at 1% of property value per year), and opportunity cost of the down payment. For renting, we include monthly rent with an annual increase. Property appreciation is factored into the buy calculation.

What is the break-even point in rent vs buy?

The break-even point (or crossover year) is the point at which the cumulative cost of buying becomes less than the cumulative cost of renting. Before this point, renting may be the better financial choice. After it, buying starts to look more economical. Our calculator shows this year based on your inputs.

How does the mortgage interest rate affect rent vs buy?

The mortgage interest rate has a large impact on the buy side. Higher rates mean more of each payment goes to interest rather than building equity. At very high rates, renting can remain the better option even over long periods, especially in markets where rents are relatively low.

Home CalculatorsRent vs. Buy Calculator

Loan Inflation SIP Wealth Rent vs Buy

Rent vs. Buy Calculator

Compare the true long-term cost of buying vs. renting a home.

Your Details

Property Price$15,000

Monthly Rent$1,500

Mortgage Interest Rate7.2%

Analysis Period48 MO (4.0 yr)

Buy Path

Net Worth at End$16,883.00

Monthly Payment

$288.00

Total Invested

$3,000.00

Rent Path

Net Worth at End$3,966.00

Monthly Rent

$1,500.00

Investment Gain

Compounding

Break-even at Year 1

Buying becomes more economical than renting from Year 1 onwards.

Savings Insight

Property vs Rent Comparison

Buying holds a mathematical edge after Year 1. If property appreciation drops below 3.6%, renting remains superior.

How It Calculates

Over a term of 48 months, your fixed monthly payment is $288.00. Total interest paid is $1,847.00, which works out to a 7.2% annual cost of borrowing.

💡Total Interest on $15,000.00: $1,847.00

Monthly Commitment: $288.00

Tips to Save More

Adjusting the term length changes how much total interest you pay.
Comparing a few rate scenarios helps you see the true cost of borrowing.

Example Scenarios

Sample scenarios using current reference rate data.

Reference Data

$10,000 over 2 years

7.5% APR

Monthly Payment$450.00

Total Interest$799.90

Over a term of 24 months, your fixed monthly payment is $450.00. Total interest paid is $799.90, which works out to a 7.5% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

$20,000 over 4 years

6.9% APR

Monthly Payment$478.00

Total Interest$2,943.88

Over a term of 48 months, your fixed monthly payment is $478.00. Total interest paid is $2,943.88, which works out to a 6.9% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

$35,000 over 5 years

7.2% APR

Monthly Payment$696.35

Total Interest$6,780.96

Over a term of 60 months, your fixed monthly payment is $696.35. Total interest paid is $6,780.96, which works out to a 7.2% annual cost of borrowing.

Source: Bank of Canada · Updated 2026-04-01

How a rent vs buy calculator works

A rent vs buy calculator compares the long-term cost of owning a home (mortgage, maintenance, property tax, transaction costs) against renting the equivalent property and investing the difference. It's not just about the monthly payment - it accounts for opportunity cost on your deposit, property appreciation, and the equity you build by paying down a mortgage.

The formula

Owning net cost = Total housing costs − Equity built − Property appreciation

Housing costs = Mortgage payments + property tax + maintenance + insurance + transaction costs (stamp duty, fees).
Equity built = The principal portion of each mortgage payment that goes toward owning the home.
Property appreciation = Expected annual % increase in the home's value.
Rent comparison = Rent paid + opportunity cost (return you'd have earned by investing the deposit instead).

Inputs explained

Property price: The purchase price of the home you're considering.
Monthly rent: Rent for an equivalent property in the same area.
Mortgage rate: The rate you'd realistically get on the mortgage, given your deposit and credit profile.
Analysis period: How many years you'd realistically stay in the home. Short stays (under 5 years) usually favour renting due to transaction costs.

When to use this calculator

Rent vs Buy Calculator - Frequently Asked Questions

Common questions about using this tool for CA.

The rent vs buy decision depends on several factors: the price-to-rent ratio in your local market, how long you plan to stay, mortgage rates, property appreciation, and opportunity cost of the down payment. Our calculator compares the total cost of buying vs renting over your chosen period and shows the crossover year - when buying becomes more economical.

Built & maintained by: Dhanasekar · Developer

Formula reference: Bank of Canada

Data last updated: April 1, 2026

This is a free educational tool, not financial advice.

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Disclaimer

Important: This calculator provides estimates for informational purposes only and does not constitute financial advice. Actual rates and terms may vary. Always consult a qualified financial advisor before making financial decisions.

Rate reference: FCACBank of CanadaUpdated 2026-04-01

Rent vs. Buy Calculator

Your Details

Break-even at Year 1

Savings Insight

How It Calculates

Tips to Save More

Example Scenarios

$10,000 over 2 years

$20,000 over 4 years

$35,000 over 5 years

The formula

Inputs explained

When to use this calculator

Rent vs Buy Calculator - Frequently Asked Questions

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Disclaimer

Common mistakes to avoid