Buy vs rent scenario
Buy vs rent in Ontario with land transfer tax
Ontario’s land transfer tax is a meaningful up-front cost the renter does not pay. This case uses a first-time buyer rebate.
After 10 years, renting and investing finishes ahead of buying by about $46,843. On these assumptions buying does not overtake renting within 40 years.
Year-by-year results for this scenario
After 10 years, renting and investing finishes ahead of buying by about $46,843. On these assumptions buying does not overtake renting within 40 years. The owner's first-month cash cost is $5,384, compared with $2,825 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $879,750 | $664,846 | $167,975 | $226,734 | −$58,760 |
| 2 | $910,541 | $649,003 | $213,494 | $270,292 | −$56,799 |
| 3 | $942,410 | $632,439 | $260,775 | $315,845 | −$55,070 |
| 4 | $975,395 | $615,121 | $309,886 | $363,491 | −$53,604 |
| 5 | $1,009,533 | $597,015 | $367,618 | $413,336 | −$45,718 |
| 10 | $1,199,009 | $493,351 | $652,800 | $699,643 | −$46,843 |
Questions people ask
Does buying beat renting in this scenario?
After 10 years, renting and investing finishes ahead of buying by about $46,843. On these assumptions buying does not overtake renting within 40 years.
What changes in this scenario?
Ontario’s land transfer tax is a meaningful up-front cost the renter does not pay. This case uses a first-time buyer rebate. All other inputs keep the calculator’s default planning values.
Is this a forecast?
No. It is an illustration of how one assumption changes the buy vs rent comparison. Replace the inputs with your own numbers.
Other buy vs rent scenarios
- 5% down, 30-year amortization
- 20% down, ten years
- Five-year stay
- Seven-year stay
- Fifteen-year stay
- Full amortization
- Rates at 6.5%
- Rates at 3.5%
Educational illustration; not advice. See the assumptions.