# Rent vs Buy in Canada: How to Decide With Real Numbers > Rent or buy in Canada? A clear way to compare: unrecoverable costs, what your down payment could earn, how long you'll stay and the tax rules. Source: https://trykosh.com/learn/rent-vs-buy-canada Guide - Homes and mortgages # Rent vs buy in Canada: a way to decide that isn't a slogan "Rent is throwing money away" is half true: so are mortgage interest, property tax and maintenance. The useful comparison is what you pay and never get back in each case, plus what your down payment would have earned elsewhere. Here's how to run it for your own situation. Updated October 31, 20263 min readBy the Kosh team On this page[Compare unrecoverable costs, not rent vs mortgage payment](#unrecoverable)[A worked illustration](#illustration)[How long will you stay?](#time)[The tax side](#tax)[The renter's side of the deal](#renter)[Questions to answer before deciding](#checklist)[FAQs](#faq) ## Compare unrecoverable costs, not rent vs mortgage payment A mortgage payment isn't all cost: part of it repays principal, which you keep as equity. Rent is all cost. So comparing rent with the mortgage payment is misleading. Compare the money that's gone for good in each case: Renting Owning Rent Mortgage interest Tenant insurance Property tax Maintenance and repairs Home insurance and condo fees What your down payment could have earned invested instead Buying and selling costs: land transfer tax, legal fees, realtor commission ## A worked illustration Every number here is an assumption to show the method, not a forecast. Take a $600,000 home with 20% down ($120,000). Assume property tax of 0.8% of the price a year, maintenance of 1%, a mortgage rate of 4.5% and that the down payment could otherwise earn 4% a year invested. - Property tax and maintenance: $10,800 a year. - First-year mortgage interest on $480,000: about $21,600. - Forgone return on the down payment: $4,800. - Total unrecoverable cost: about **$37,200 a year, or $3,100 a month**, before insurance, condo fees and transaction costs. In this illustration, if a comparable home rents for well under $3,100 a month, renting and investing the difference is cheaper year to year; if it rents for more, buying is. Then add the two things the yearly view misses: how much the home's value changes, and the one-off cost of buying and selling. ## How long will you stay? Land transfer tax, legal fees and, when you sell, a realtor's commission can add up to a large share of the price. Spread over two years they're crushing; over fifteen they're modest. If you might move within a few years for work or family, that alone often decides it in favour of renting. ## The tax side - **Principal residence exemption.** Gains on the home you live in are generally not taxed when you sell, which is a real advantage of owning over investing in a taxable account. - **FHSA and Home Buyers' Plan.** First-time buyers can build a down payment with tax deductions and withdraw it tax-free. See the [FHSA guide](/learn/fhsa-explained). - **Home buyers' amount.** First-time buyers can claim up to $10,000, a non-refundable credit worth up to $1,400 federally in 2026. - **Renters keep flexibility.** Money not tied up in a down payment can go into a TFSA and RRSP, where growth is also sheltered. ## The renter's side of the deal Renting comes out ahead only if you actually invest the difference. A renter who spends what an owner would have put into equity usually ends up behind, which is part of why owners' net worth tends to be much higher in Statistics Canada's surveys. Automate the investing on payday and the comparison becomes fair. ## Questions to answer before deciding 1. What does a comparable home rent for, and what would its total unrecoverable cost be? 2. How long am I likely to stay? 3. Could I pay the mortgage at the stress-test rate and still save? See [how mortgages work](/learn/how-mortgages-work-in-canada). 4. Would I need [mortgage insurance](/learn/cmhc-mortgage-insurance), and how much? 5. If I rent, will I really invest the difference every month? [Free tool**Mortgage payment calculator**Work out your mortgage payment the way Canadian lenders do, with semi-annual compounding, any payment frequency and CMHC insurance added when you put down less than 20%.](/tools/mortgage-payment-calculator)[Free tool**Compound interest calculator**See how savings grow when interest earns interest, with a starting amount, monthly contributions and the compounding your account uses.](/tools/compound-interest-calculator) **Where Kosh fits** Kosh starts from what you actually spend and save each month, from your statements, so a rent-vs-buy comparison uses your real budget rather than a guess, and it shows how the down payment fits alongside your FHSA, RRSP and TFSA. ## Frequently asked questions Is it better to rent or buy in Canada? It depends on the home, the price-to-rent ratio where you live, how long you'll stay and whether you'd invest the difference if you rented. Compare unrecoverable costs, not rent against the full mortgage payment. Is rent money wasted? Rent is a cost, but so are mortgage interest, property tax, maintenance and the return your down payment could have earned. Owning only wins if those together are lower than rent over the time you stay. How long should I stay in a home to make buying worth it? There's no fixed answer, but buying and selling costs are large, so the longer you stay the more they are spread out. If you may move within a few years, renting is often cheaper. Do I pay tax when I sell my home in Canada? Gains on your principal residence are generally exempt from tax under the principal residence exemption. You still report the sale on your return. What tax help is there for first-time buyers? The FHSA, the Home Buyers' Plan and the home buyers' amount, a credit on up to $10,000 claimed the year you buy. ## Sources - [CRA: Home buyers' amount (line 31270)](https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html) - [Statistics Canada: Survey of Financial Security, 2023](https://www150.statcan.gc.ca/n1/daily-quotidien/241029/dq241029a-eng.htm) - [FCAC: Down payment](https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html) Written by the Kosh team and checked against the rules in force on October 31, 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not registered with any Canadian securities regulator as an adviser or dealer, does not recommend specific securities, and does not hold your money or execute trades. Tax figures are estimates; confirm with the CRA or a qualified professional before acting. Investing carries risk. ## Upload your statement and Kosh does this for you. Kosh reads your bank, card and investment statements, estimates your federal and provincial tax and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-rent-vs-buy-canada)