Reference
Buy vs rent calculator assumptions and default inputs
The buy vs rent calculator starts with default inputs so you can see a result immediately. They are illustrative planning assumptions, not market data, current rates or forecasts. Replace each one with your own numbers; this page explains what each input does.
Why defaults are not market data
Home prices, rents, mortgage rates and investment returns change constantly and differ by city, property type and lender. A fixed default cannot be right for everyone and is not a claim about today’s market.
The defaults describe one coherent example: a $600,000 home in Alberta with 20% down, a 4.5% mortgage rate, a 25-year amortization and a $2,300 monthly rent comparison. They exist to make the tool usable at first load. Your own figures will always be more relevant.
Purchase and mortgage inputs
Price, down payment, rate, amortization and term set the mortgage. The minimum down payment and the default insurance premium follow the federal rules described in the methodology. The renewal rate defaults to the original rate, but nobody knows what rates will be at renewal, so test higher and lower values.
Closing costs depend on the province. Alberta’s default is Land Titles fees; other provinces use their transfer-tax schedules, with some labelled approximate. The defaults for legal fees, title insurance, inspection and other items are planning estimates you can override.
Ownership costs
Property tax, insurance, maintenance, utilities and condo fees vary a lot between properties. Defaults are deliberately simple so you can replace them with quotes and actual bills.
Maintenance is set as a percentage of the home’s value each year, because older and larger homes cost more to maintain. A special-assessment allowance is available for condominiums and major repairs, and a rental suite can offset costs, after vacancy and tax allowances.
Market and investment inputs
Home appreciation, rent growth, inflation and investment return are the most uncertain inputs and often decide the result. Past growth and returns vary by city and period and are not guaranteed, so no default should be read as an expectation.
The investment return is nominal, before an optional tax-drag percentage that stands in for taxes on investment income. Inflation affects insurance, utilities and the real-dollar view. The Bank of Canada’s inflation target is 2%, which is why that is the default.
Default inputs at a glance
The table lists the defaults. Change any of them; the result updates immediately.
| Input | Default | Why it is editable |
|---|---|---|
| Home price | $600,000 | Your target price |
| Down payment | 20% | Depends on your savings; minimums apply |
| Mortgage rate | 4.5% | Varies by lender, term and date |
| Amortization / term | 25 years / 5 years | Chosen at application |
| Property tax | 0.65% of value a year | Varies by property and municipality |
| Home insurance | $1,500 a year | Replace with a quote |
| Maintenance | 1.0% of value a year | Depends on age and condition |
| Extra utilities for an owner | $150 a month | Depends on the property |
| Home appreciation | 3.5% a year | Uncertain; test a range |
| Monthly rent | $2,300 | Your comparable rental |
| Rent growth | 3% a year | Varies; rules differ by province |
| Tenant insurance | $300 a year | Replace with a quote |
| Investment return | 5.5% a year, nominal | Uncertain; test a range |
| Investment tax drag | 0% | Depends on accounts used |
| Inflation | 2% a year | Matches the Bank of Canada target |
| Time horizon | 10 years | Your expected stay |
| Sale commission | 4% plus GST | Negotiable |
| Break penalty | 3 months of interest | Depends on your mortgage contract |
How to use them well
Start with quotes and real figures for the inputs you can verify: price, rent, insurance, property tax and mortgage rate. Then treat appreciation, rent growth and returns as ranges and use the sensitivity and scenario tools.
If the answer flips with small changes to one input, that input deserves closer thought. The glossary defines each term, and the calculator is educational, not advice.
Questions people ask
Are the default values current market figures?
No. They are illustrative planning assumptions chosen to form one consistent example. Replace them with your own numbers.
Which assumptions matter most?
Usually the time horizon, home appreciation, rent growth and investment return, followed by the mortgage rate and the purchase price. Test a range for each.
Why is the investment return before tax?
Tax depends on the accounts you use. The calculator offers a single tax-drag percentage as a simple stand-in, set to zero by default.
Official references
Educational information, not financial, tax, legal or mortgage advice. Rules and rates change; confirm current details with an official source or a qualified professional.