Should you rent or buy? This rent or buy calculator compares the full cost of both over the years you plan to stay, using Ontario’s rules: land transfer tax, mortgage insurance, rent control and Canadian taxes. Rules checked October 4, 2026.
How it works
- Buying: the down payment and closing costs (land transfer tax with first-time buyer refunds, the 8% Ontario tax on any mortgage insurance, and your other costs), then mortgage payments, property tax, maintenance, insurance, condo fees and utilities. At the end, you get back the sale price minus selling costs and what is left on the mortgage.
- Renting: the rent deposit for the last month, the rent each year, and tenant insurance. The deposit comes back at the end.
- Opportunity cost: every dollar spent on either side could have been invested until the sale. The calculator counts what it would have earned, on both sides.
- Canadian taxes: interest on a mortgage for the home you live in is not tax-deductible, so there is no deduction here. The gain on selling your principal residence is not taxed if it was your principal residence for every year you owned it. A renter can invest in a TFSA or FHSA, where gains are generally tax-free, or in a regular account, where half of a capital gain is taxed.
- Rent control: for units first lived in before November 15, 2018, rent increases follow Ontario’s guideline, which is capped at 2.5% a year.
- Selling before the term ends: breaking a mortgage partway through its term usually costs a penalty of at least 3 months’ interest, and it can be higher with a fixed rate. The calculator adds 3 months’ interest when the sale falls mid-term.
- Where the renter invests: the default is a regular account, because the FHSA ($8,000 a year, $40,000 in total) and the TFSA have contribution limits. Choose TFSA or FHSA only if all the money fits.
How to read the result
- The headline shows which option costs less over the years you entered, and by how much.
- The break-even rent is the monthly rent where both options cost the same. If a similar home rents for more than that, buying comes out ahead.
- The chart shows who comes out ahead if you move out after each year. Buying usually looks better the longer you stay, because the upfront costs are spread over more years.
- The line about home prices shows the growth rate at which the answer flips. It shows how much the result depends on a number nobody can predict.
Not included: the tax refund on FHSA deposits, Home Buyers’ Plan repayments, the first-time home buyers’ tax credit, interest on the rent deposit, any extra insurance premium for a 30-year amortization, and new-build HST rebates. The calculator is for a resale home, and property tax is an estimate.
The answer is about money only. Your job, your family’s plans and the home itself matter too. To see whether you qualify, try the affordability calculator; for the cash you need, the closing costs calculator and the FHSA and HBP planner.
Want to go over your result?
Send your numbers on WhatsApp with the button above, or leave your details below. I go over them with you, in English or Arabic, at no cost.
Sources (official pages, checked October 4, 2026)
- Ontario – Calculating land transfer tax (rate brackets, updated 2026-04-22)
- Ontario – Land transfer tax refunds for first-time homebuyers (max $4,000)
- CMHC – Mortgage loan insurance cost (premium table)
- Ontario – Retail sales tax (8% on insurance premiums)
- Ontario – Residential rent increases (2026 guideline 2.1%)
- CRA – Principal residence and other real estate (no tax on the gain if it was your principal residence every year; modified Feb 5, 2026)
- Prime Minister of Canada – proposed capital gains tax increase cancelled (March 21, 2025): the inclusion rate stays at one-half
- CRA – What is a TFSA (income and gains in the account are generally tax-free)
- CRA – Participating in your FHSAs ($8,000/yr, $40,000 lifetime, carry-forward)
- CRA – Line 22100, carrying charges and interest expenses (no deduction for interest on money borrowed for personal use)
- Financial Consumer Agency of Canada – Mortgage prepayment penalties (higher of 3 months’ interest or the interest rate differential)
Programs and limits change, often at budget time. Confirm the current rules on the official page before you rely on them.
Talk to me in English or Arabic: call or text (647) 465-3710, message me on WhatsApp, or email Mohieddinrealtor@gmail.com.
General information only – not financial, legal or mortgage advice. Please consult a licensed professional about your own situation.