Property: Which is better, buying or renting?

Buying a property may seem more profitable than renting a house or apartment because you accumulate real estate. However, renting requires a smaller initial outlay, so you can use the surplus for other purposes such as investing. This tool compares both options using information provided by you.

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01 Renting
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$
$
02 Buying
$
$
%
%

years
%

Recurring costs

$
$
$
$
$

Non-recurring costs

$
$
$
$
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03
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Cash

Whether you are renting our buying, it is assumed your cash situation is the same as if you were buying property. The calculator assumes you can afford the required payments.

Mortgage loan

Price paid for the property

It is assumed you paid fair value for the property.

Home Buyers’ Plan and FHSA

The option of using the HBP or the FHSA is not considered.

Projection time period

The time period simulated is 50 years. A different conclusion may be reached if you intend to keep the property for longer than that.

Rental income

Renting out part of the property may have tax consequences. As those consequences are not considered by the tool, you will need to adjust certain figures. For example, part of the capital gain from the sale of the property may be taxable.

The results are approximate. You shouldn’t base your decision on these figures alone. The results are based solely on the data provided and financial considerations. This calculator is for your personal educational or informational use only.

This tool does not provide legal or financial advice. We encourage you to seek professional advice based on your needs and situation.

Theoretical value of wealth accumulated over time by renting or buying

The following chart or table shows how much a person would accumulate if they were to buy a property or if they were to use the same cash assets to rent their living space and invest the surplus.

We realize that if you do rent, you likely won’t place all the surplus cash you may have in investments. If you feel you will get just as much value out of spending your surplus cash as you would get out of investing it (if, for example, you get the same feeling of well-being from travelling as you do from increasing your financial wealth), the conclusion arrived at by the calculator will still be valid; however, the amounts indicated in the chart and table, instead of showing you what would be accumulated, would primarily be used to see how big the difference is between renting and buying and the long-term trend. You can see if the difference is enough to be a deciding factor from a financial perspective.

The indicated net value assumes you are in the same cash situations as if you had bought a property. If this isn’t the case, ask yourself whether you can afford to buy a property.

Cash includes the amounts required for mortgage payments, home insurance, school and municipal taxes, electricity and the other expenses you’ve indicated, minus the amounts required to rent a living space. It also includes the down payment, tax on mortgage insurance, if applicable, transfer duties and other costs involved in buying a property.

The indicated value also includes the return obtained over the years on the cash that is invested, using the rate of return you indicated.

The net value corresponds to the value of the property minus the mortgage loan balance and any costs of sale. In other words, for each year considered, the indicated net value takes the sale of the property into account. Since selling costs can be substantial, the value shown in this column may be negative.

Years Renting Buying Difference

Mortgage payments: view bi-weekly payment details

Payment number Outstanding mortgage Periodic payment Interest Principal Balance at period-end