Buy vs. rent over 25 years
$900,000 home · 20% down · Ontario 2026
Buy — net equity
$2,018,574
home value − mortgage − selling costs
Rent — portfolio
$1,405,503
TFSA + non-reg, after tax
Result
Buying ahead
by $613,072
Total housing cost
Buy$1,105,025
Rent$1,321,658
non-recoverable spend
Net equity vs. invested portfolio
both shown as the cash you'd walk away with if you liquidated that year — Buy nets selling costs, Rent nets deferred tax
Buy overtakes at year 7.
Year-by-year breakdown
Home value$1,269,539
Mortgage balance$526,883
Gross equity$742,656
Mortgage paid (year)$49,028
— interest$25,389
— principal$23,639
Property tax + insurance + maint.$18,900
Total outlay (year)$67,928
Net equity if sold$677,179
How sensitive is this?
the winner at ±1% on the two most decisive inputs
Home appreciation
| −1% | $1,583,122 / $1,405,503 | Buy |
| base | $2,018,574 / $1,405,503 | Buy |
| +1% | $2,567,646 / $1,405,503 | Buy |
Investment return
| −1% | $2,018,574 / $1,205,993 | Buy |
| base | $2,018,574 / $1,405,503 | Buy |
| +1% | $2,018,574 / $1,639,825 | Buy |
Mortgage & cost summary
Monthly payment$4,086
Total interest (full amortization)$505,704
Upfront cash (down + closing + LTT + PST)$198,475
Land transfer tax (after rebates)$14,475
Selling costs at end$108,346
The decisive assumption. This compares equal total housing outlay: the renter invests the monthly difference and the upfront cash the buyer spent (100% invested here). If those savings are spent instead of invested, buying is usually the better outcome. The model also gives the home a tax-free principal-residence gain while the renter's investment gains are taxed — a real asymmetry that favours buying.
Assumptions & limitations
Ontario purchase, 2026 land-transfer and CMHC schedules; Toronto municipal LTT via the location toggle. The mortgage rate is held constant for the full amortization — real Canadian mortgages renew each term at unknown future rates, a major simplification. Canadian semi-annual compounding is used; lender qualification (stress test, GDS/TDS) is not modelled. Property tax, insurance, and maintenance are held nominal. The renter and buyer are held to equal total monthly housing outlay; the renter invests the positive difference (TFSA first, then non-registered) and draws down on the negative. The non-registered portfolio uses a blended income-type tax drag with a deferred-vs-realized capital-gains toggle; TFSA re-contribution timing after withdrawals is simplified. The home receives a tax-free principal-residence gain while investment gains are taxed — an asymmetry that favours buying. NRST, vacant-home taxes, and the GST/HST new-housing rebate are not modelled.
This tool is for illustration purposes only and does not constitute financial advice.
See the terms of use for full disclaimers. Rates and schedules must be re-verified.