What appreciation rate should I assume?

Canadian long-run average is roughly 3–4% nominal, though regional and decade-to-decade variance is huge. Be conservative — assuming 5–7% appreciation tilts every comparison toward buying and isn't a safe planning assumption.

What return should I assume on the down payment if I rent?

For a long-term equity portfolio, 7% nominal pre-tax is a reasonable average (S&P 500 historical real return ~7%, nominal ~9%). For a TFSA/RRSP-sheltered account, your effective return is higher because no tax drag.

Does this account for closing costs and selling fees?

Yes. Closing costs are added to your initial buy outlay. End-of-horizon proceeds subtract roughly 5% for realtor + legal fees on the sale. Both are configurable.

Is the comparison fair if I rent a smaller place?

It only works if you compare apples to apples. The 'rent' input should be what you'd pay to rent the same kind of place you'd buy — same neighbourhood, same size, same condition. Pricing a 5½ in Mile End vs renting a 3½ in Saint-Henri muddies the math.

What about the tax-free principal residence gain?

In Canada, gains on your principal residence are tax-free. The calculator assumes that. For an investment property the math changes — capital gains tax applies to 50% of the gain at your marginal rate.

Why does my GST/QST not show up here?

GST/QST only apply to new builds. Used residential resales (most purchases) are exempt, so this calculator doesn't add them. If you're buying new construction, model the GST/QST separately.

Rent vs buy · Honest math

Rent or buy? Run the real numbers.

Buying isn't automatically better. This calculator compares the all-in cost of owning (PITI + maintenance + closing) against renting plus investing the down payment, over the time horizon you actually plan to stay.

Assumptions

Home price

Down payment

Mortgage rate

AmortizationAnnual appreciation

Long-run Canadian average is 3–4% nominal.

Comparable monthly rent

Annual rent increase

Investment return on down payment

Pre-tax. Long-run S&P 500 average is ~7% real, ~9% nominal.

Property tax (annual)

Maintenance (% of price/yr)

Closing costs (% of price)

Time horizon (years)

Results

Buying wins by

$57,303

Total cost of buying$155,831

Total cost of renting$213,134

Equity built$374,813

Down payment grown to$238,025

Foncier the whole deal

This number is one of seventy.

Cap rate is a start. The full Foncier analyzer adds DSCR, IRR, ten-year cashflow projections, scenarios, side-by-side compare, and live community rent comps — for free, on your first three deals.

Create a free account See plans

How this is calculated

Buying total = total cash out (down + closing) + cumulative PITI + maintenance + tax − end equity (sale proceeds at appreciated value − remaining mortgage − ~5% selling costs). Renting total = cumulative rent (with inflation) − ending value of the down payment grown at your assumed return. Whichever total is lower wins for that time horizon.

Worked examples

When buying wins, when it doesn't.

Buy if you stay 10+ years

Buying wins by ~$87k

A $550,000 home with 20% down at 5.25%. Comparable rent: $2,400/mo growing 3%/yr. Appreciation 3%, investment return 7%. Over 10 years buying clears renting by ~$87k thanks to equity build and appreciation.

Horizon10 years

Equity built~$280k

Investment grown~$216k

VerdictBuy

Rent if you move in 4 years

Renting wins by ~$22k

Same property and assumptions, but you only stay 4 years. Closing costs and selling fees haven't been amortized; equity is still small. Renting + investing the $110k down at 7% wins by ~$22k.

Horizon4 years

Equity built~$95k

Investment grown~$144k

VerdictRent

Rent vs buy questions

About the rent vs buy decision.

Usually yes if you stay 7+ years and invest the difference if you rent. Below 5 years, closing costs and selling fees often make renting + investing the down payment win. Between 5–7, it depends on local appreciation, your investment returns, and rent inflation.

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