Question 1

Is it better to rent or buy in Canada?

Accepted Answer

It depends on your situation: real estate prices, rent, expected duration, and investment returns. In expensive markets (Toronto, Vancouver), renting and investing the difference can be more profitable. This calculator helps you compare both scenarios.

Question 2

How does the 'rent and invest the difference' concept work?

Accepted Answer

If buying costs more monthly than renting, you invest the gap in diversified ETFs. Over time, stock market returns (historically ~7% per year) can exceed real estate appreciation (~3-4% per year).

Question 3

What is CMHC insurance?

Accepted Answer

If your down payment is less than 20%, you must pay mortgage insurance (CMHC). The premium ranges from 2.8% to 4% of the loan amount and is added to your mortgage.

Question 4

Is rent just throwing money away?

Accepted Answer

No. Rent pays for shelter, just like mortgage interest, property taxes, and maintenance don't build equity. The real question is: can the money you save by renting be better invested elsewhere?

Question 5

What is the real estate appreciation rate in Canada?

Accepted Answer

Historically, Canadian real estate appreciates about 3-4% per year on average, but it varies greatly by region and period. Major cities have seen higher gains but also corrections.

Question 6

How many years before buying becomes more profitable?

Accepted Answer

Generally, you need to own for at least 5-7 years before buying becomes profitable compared to renting, due to buying and selling costs. The longer your horizon, the more buying tends to be advantageous.

Year	Buy equity	Portfolio
1	87,226 $	131,678 $
5	174,212 $	254,829 $
10	303,962 $	454,375 $
15	462,328 $	721,788 $
20	656,376 $	1,082,201 $
25	895,090 $	1,570,500 $

Year	Buy equity	Portfolio
1	87,226 $	131,678 $
5	174,212 $	254,829 $
10	303,962 $	454,375 $
15	462,328 $	721,788 $
20	656,376 $	1,082,201 $
25	895,090 $	1,570,500 $

Rent vs Buy: Which Is the Better Financial Choice?

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Rent vs Buy: Which Is the Better Financial Choice?

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Rent vs Buy: Which Is the Better Financial Choice?

FAQ

Is it better to rent or buy in Canada?

How does the 'rent and invest the difference' concept work?

What is CMHC insurance?

Is rent just throwing money away?

What is the real estate appreciation rate in Canada?

How many years before buying becomes more profitable?

Rent vs Buy: Which Is the Better Financial Choice?

FAQ

Is it better to rent or buy in Canada?

How does the 'rent and invest the difference' concept work?

What is CMHC insurance?

Is rent just throwing money away?

What is the real estate appreciation rate in Canada?

How many years before buying becomes more profitable?