Should you rent or buy? It’s an age-old question that Canadians ask themselves. 

While owning a home is a common goal among Canadians, many are unable to afford a home purchase. And others who have the financial capability to buy a house may simply choose to rent for various reasons.

Either way, it’s helpful to compare the costs of renting versus owning to help you determine which of the two makes more financial sense for you. And the easiest way to calculate these figures is by using a rent vs own calculator.

Let’s get into more detail about renting versus owning.

Benefits Of Renting In Canada

There are a number of benefits to renting, including but not limited to; 

No Down Payment Required

One of the biggest obstacles when it comes to buying a home for many Canadians is the down payment needed to secure a mortgage. Given the sky-high cost of homes these days, a down payment can amount to tens of thousands of dollars or more. 

Rather than having to squeeze your budget and save up for your down payment, you can rent instead where all you need to worry about is your monthly rent payments.  

No Closing Costs

Another significant financial requirement to buy a home in Canada is the need to cover the cost of closing fees, which can amount to 2%-4% of the home purchase. When you close on a mortgage, there are several fees that must be paid upfront. Again, this is another significant cost that renters don’t have to be concerned about.

Flexibility In Location

When you rent, you’re not tied down to one location. While you’re obligated to adhere to the terms of your lease, you can easily move to another place when your lease is up without having to deal with all the red tape that comes with selling a home. Simply provide your landlord with ample notice, and you’re free to move on to your next rental unit. 

Learn how to terminate your lease in Canada.

Low Maintenance

Landlords typically take care of the majority of maintenance and repair tasks, though renters may sometimes be asked to tend to certain chores, such as lawn mowing or snow removal. But when it comes to repairs, landlords typically take care of it and cover the costs. 

Tenant rights and responsibilities across Canada

Benefits Of Buying A House In Canada

Renting may have its perks, but there are several benefits of being a homeowner that you won’t get as a tenant:

No Evictions

You own your home, so you are in control over if or when you choose to move. As long as you keep up with your mortgage payments, you won’t ever have to deal with anyone telling you when you need to vacate your home.

Long-Term Investment

Owning real estate is one of the best ways to build wealth. Holding on to this valuable asset for the long haul can provide you and your family with a solid investment that you can pass down to your children. Moreover, houses typically appreciate in value, so as you pay off your home and house prices increases, you’ll build more equity.  

Build Equity

Part of every mortgage payment you make goes towards the equity in your home. Over time, you can build substantial equity, which you can profit from if you sell. You can even use that equity while you’re still living in your home in the form of a home equity loan or home equity line of credit to cover a large expense. 

Rent Out Your Home For Additional Income

If you have extra living space to accommodate a tenant, you might consider renting it out to bring in some extra income and help cover the mortgage. This is ideal for a basement suite, but you might also consider renting out a room in your home with shared common areas. 

Should You Rent Or Buy? Comparing Costs

There are perks and drawbacks to both renting and owning a home, and each comes with its own specific costs. Let’s go over what these expenses are for each scenario:

Mortgage Costs To Consider 

Taking out a mortgage to purchase a house? Consider these costs:

Property Taxes

Every year, you’ll need to pay property taxes on your home. The rate you pay depends on the home’s location, size, age, and construction type. 

Homeowner’s Insurance

Before you take out a mortgage, your lender will want to make sure that the home is insurable. As such, you’ll need to provide the lender with proof of homeowner’s insurance. This is an ongoing premium you’ll need to pay while you retain ownership of the property. 

Closing Costs

While buyers don’t typically pay any real estate commissions, there are certain closing costs that need to be paid before a mortgage closes on a home purchase, such as the following:

Maintenance & Repair Costs

Since you own the home, any maintenance or repairs that need to be made to your rental unit will come out of your pocket. 

Rent Costs To Consider 

Continuing to rent? Consider these costs:


All the above-mentioned items are costs that you don’t have to worry about when you rent. The only cost you need to cover is your monthly rent. However, keep in mind that you’re not building any equity in the property and don’t actually own anything, so your net worth will not change, unless you acquire other investments. 

Renter’s Insurance

Similar to homeowner’s insurance, most landlords in Canada will ask that you purchase a renter’s insurance policy to protect the unit you rent.

What Do You Need To Use A Rent Or Buy Calculator?

Using a rent or buy calculator makes it easier to get a quick idea of what your financial obligations will be to help you decide which of the two is a better fit for you. When using this calculator, you’ll need the following pieces of information:

Check Out Our Other Tools & Calculators

When Should You Rent vs. Buy?

The decision to rent or buy comes down to your particular situation and needs. 

You should rent if …

You should buy if …

Final Thoughts

Owning a home allows you to build equity and wealth and gives you more stability and control than renting. On the other hand, renting offers more flexibility without the major financial hurdles in the way. Whichever route you choose, be sure to crunch the numbers to find out the exact costs associated with both. 

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