Use this calculator to compare the true financial cost of renting vs. buying a home in the US or Canada. Enter your rent, target home price, and down payment — the calculator handles everything from CMHC premiums and land transfer tax to mortgage interest, property taxes, maintenance, and the opportunity cost of your down payment. Get a clear break-even year and side-by-side cost comparison.
Your Situation
Tell us about your current housing and what you're considering.
Mortgage Details
Enter your expected mortgage terms and ongoing housing costs.
Market Assumptions
These projections power the long-term comparison. You can adjust them in the what-if sliders after calculating.
Crunching your numbers…
Drag any slider — results update instantly.
| Cost Item | Renting | Buying |
|---|
How We Calculate This
Monthly Mortgage Payment
We use the standard amortization formula: P × r(1+r)^n / ((1+r)^n − 1) where P is the loan principal, r is the monthly interest rate, and n is the number of months. For Canada, the CMHC premium is added to the principal before calculating.
Equity Built Each Month
Each payment, we track the exact principal paid using the amortization schedule. We also add your home's appreciated value. Equity = running principal repaid + appreciation gain from original purchase price.
Opportunity Cost of Down Payment
If you rent instead of buying, your down payment can be invested. We compound the down payment at your assumed investment return rate year-over-year: downPayment × (1 + r)^t − downPayment. This is counted as a cost for the renter — the forgone growth they'd miss out on by parking cash in a home instead.
Break-even Methodology
We simulate month-by-month costs for both renting and buying. Buying costs include: mortgage P&I + property tax + insurance + HOA + maintenance ± PMI/CMHC, minus equity built (principal paid + appreciation). Buying also includes upfront closing costs (LTT in Canada + ~2% other costs). Renting costs include: monthly rent (escalating annually) + opportunity cost of the down payment foregone. Break-even is the first month cumulative buying cost < cumulative renting cost.
PMI (US)
Private Mortgage Insurance (~0.5% of loan/year) is applied when your loan-to-value ratio exceeds 80%. It is automatically removed from calculations once your equity (principal paid + appreciation) brings the LTV to 80%.
Mortgage Interest Tax Deduction (US)
If you itemize, you may deduct mortgage interest from your federal taxable income. We apply your marginal rate to the annual interest paid each year, reducing your net cost of buying accordingly.
CMHC Mortgage Insurance (Canada)
When your down payment is below 20%, CMHC (Canada Mortgage and Housing Corporation) insurance is required. Premiums: 5–9.99% down → 4.00%, 10–14.99% → 3.10%, 15–19.99% → 2.80%. The premium is added to your mortgage principal. 30-year amortization is not available with CMHC insurance (requires ≥20% down).
Land Transfer Tax (Canada)
Ontario and BC have tiered LTT schedules applied to the purchase price. Other provinces use a flat ~1%. First-time buyers in ON get a rebate up to $4,000 and in BC up to $8,000. The LTT is counted as an upfront buying cost in our calculations.
Frequently Asked Questions
Common questions about renting vs. buying a home.
Is it better to rent or buy a home right now? +
It depends on how long you plan to stay, your local market, and your financial situation. Buying typically wins over renting after 4–7 years when you factor in equity buildup, appreciation, and the alternative of paying someone else's mortgage. If you plan to move within 3 years, renting is usually cheaper — closing costs alone run 2–5% of the purchase price, and it takes time to recoup them.
The most important variable is your time horizon. Use this calculator with your real numbers to find your personal break-even year.
What is the break-even point when buying vs. renting? +
The break-even point is the year at which the total cumulative cost of buying falls below the total cumulative cost of renting. It accounts for mortgage payments, property taxes, insurance, maintenance, and closing costs on the buying side, versus rent payments and the investment growth of your down payment on the renting side.
Most US markets see break-even between 4 and 8 years. In high-cost markets like Toronto or Vancouver, it can be longer due to elevated home prices relative to rents.
What is included in the true cost of buying a home? +
The true monthly cost of homeownership goes well beyond your mortgage payment. It includes:
- Mortgage (P&I) — principal and interest payment
- Property taxes — typically 0.5–2.5% of home value per year
- Home insurance — US average ~$1,800/yr
- HOA or condo fees — if applicable
- Maintenance — budget 1–2% of home value per year
- Closing costs — 2–5% upfront, plus land transfer tax in Canada
Many buyers only compare their mortgage payment to their rent — which understates the true cost of buying by 30–50%.
What is CMHC mortgage insurance in Canada? +
CMHC (Canada Mortgage and Housing Corporation) mortgage insurance is required when your down payment is less than 20% of the purchase price. The premium is calculated on your mortgage amount:
- 5–9.99% down → 4.00% premium
- 10–14.99% down → 3.10% premium
- 15–19.99% down → 2.80% premium
- 20%+ down → no premium
The premium is added to your mortgage principal — not paid upfront. On a $600,000 home with 5% down, the CMHC premium would be approximately $22,800.
How does the opportunity cost of a down payment affect the rent vs. buy decision? +
Your down payment is a large lump sum that could otherwise be invested. If you put $100,000 into a home instead of the stock market, you're giving up the investment return on that $100,000 — this is the opportunity cost.
This calculator accounts for opportunity cost by modeling what your down payment (plus the monthly difference between renting and buying) would grow to if invested at your expected return rate. A complete rent vs. buy analysis must include this — without it, buying will look artificially favorable.