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Rent vs buy cost calculator

Last updated: February 14, 2022

What this tool is all about:

This tool lets you compare the value of owning a property against renting it.

Disclaimer: Perch does not guarantee the accuracy of these results and should not be treated as a recommendation. Consult a professional prior to making any decisions as it relates to your current or future real estate transactions. Please refer to our Terms of Use for more information.

Many buyers are often torn between whether they should buy or rent. We built the rent vs buy calculator so that you can determine if it will be more profitable for you in the long run to own a property or rent. 

This calculator will allow you to compare the value of owning a property against renting. It will take into account the property value, downpayment, and number of years you expect to live in the certain area. It could be more cost efficient if you plan on staying long term, as the value may go up over time and the costs to purchase or sell will be spread out over a longer period of time. If you don’t plan on staying for long, it would be better to rent. Depending on your specific situation, the rent vs buy calculator will give you a better understanding of which option is best for you.

To make this calculator simple to use, we’ve filled in some of the fields already. You can modify each field with your own information to calculate your rent vs buy cost amount. 

Property value: Add your current property value, your purchase price, or the estimated purchase price of a listing you’re considering making an offer on.

Down payment: This is the amount of savings you currently have that can go towards your purchase. If you are using this calculator on a property you already own, you can put the amount of money you have already paid down in this field.

Downpayment (%): This is the percentage of savings you currently have that can go towards your purchase. 

Current monthly rent expense: This is the amount of how much you currently pay for rent

Mortgage rate: By default, we’ve already included today’s 5-year fixed mortgage rate from Perch in this field. If you have another mortgage offer you would like to use, you can adjust the mortgage rate and mortgage type.

Property type: This is the type of property you would like to buy or rent.

Annual property taxes: This is the annual tax you pay which is levied by the governing authority of the jurisdiction where your property is located. If you’re not sure, leave it blank and we’ll estimate it for you. 

Monthly rental income: If you are renting out a part of this property, include the amount of rent you are collecting each month 

Expected annual property growth: This is the percent of how much you think your property will appreciate in the next year. 

Minimum Number of Years Until Sell This Property: The number of years until you sell your property will greatly determine whether renting or buying will be more profitable.

Before you decide whether you should rent or buy a house, there are many factors to consider that are both qualitative and quantitative. The Perch rent vs buy calculator strictly looks at the quantitative and at a high level, makes the following assumptions:

  • Rents increase by the legal limit each year
  • The monthly amount you save by renting instead of owning a home is invested and earns a monthly compounding rate of return.
  • Home prices will grow by their 10 year average unless you define an expected property growth rate.
  • Factor in all closing costs (land transfer taxes, legal, mortgage insurance, etc) associated with buying a property today and closing costs (realtor commission, legal, etc) associated with selling the property in the years you defined using the forecasted value.
  • You incur the full overhead associated with the property. This includes utilities, property taxes, maintenance and condo fees, if applicable.
  • A dollar today is not worth a dollar tomorrow. We discount all projections to their value today.
The qualitative factors include understanding the financial responsibilities of renting and buying as well as the risk and rewards. You must also be prepared for emotional factors as buying a home is one of the largest investments you will make in your lifetime. One important thing to consider is the length of time you plan on staying in that home. If you plan on staying for the long term it could be more cost efficient to purchase a property, as the value may go up over time and the costs to purchase or sell will be spread out over a longer period of time. If you don’t plan on staying for long, it would be better to rent.

For example, if you buy a $400,000 property with an annual appreciation rate of 3%, your home will be worth $970,905 after 30 years. If you decide to sell your property after 30 years, assuming you pay closing costs of 5% of your home’s value, that is an expense of $48,545. However, your property value has gone up by $570,904 which will fully cover your closing costs.

If you purchase the same house at $400,000 with the same 3% growth rate, then your house will be worth $412,000 after one year. If you decide to sell after one year, your assumed closing costs of 5% would now be $20,600. Your home has appreciated by $12,000, which does not cover your closing costs of $20,600 since you only owned the house for 1 year.

Use our rent vs buy calculator to determine whether the cost of renting would be lower than the cost of buying or vice versa. We estimate the likelihood of the home appreciating enough (based on historic growth rates) to determine how likely you’d earn more as a homeowner than a renter.
Long term investment

Owning your own property is a long term investment that can benefit you if the value goes up over time. Not to mention that if it’s your principal residence, you typically don’t pay tax on the property gains when you sell.


Sometimes owning a home is better than renting as there will never be the risk of you being evicted. In some provinces, such as Ontario, the Landlord and Tenant Board of Ontario allows landlords to evict tenants if they plan on renovating, selling their home or even for personal use.

In addition, as a renter, your rent could increase each year if your landlord wanted to. However, as a homeowner, you can choose to lock in a consistent mortgage payment with a fixed rate in a term as long as 10 years.

Extra income

When you own your home, you have the option to rent your spare bedrooms or floors. All of the rent will go to you as the homeowner which can help you pay off your mortgage faster.
Maintenance costs 

As the homeowner, you will be responsible for all maintenance costs for the upkeep of your home. This will include regular maintenance and repairs. In a condo, this can include things like special assessments to cover unexpected costs to repair the roof or increases in insurance. In a house, this can include having to pay for lawn care and winter maintenance, HVAC, roofing, and appliances, to name a few.

Lack of flexibility

You have less flexibility when you own your own home compared to renting. Although owning your own property is an asset, it isn’t very liquid. It may take time to sell your home and you need to qualify for financing to leverage your home’s equity without selling it.

Less disposable income 

Buying a house is a large responsibility and many homeowners take on a significant amount of debt, which can prevent them from investing money elsewhere and having little money for other needs and wants. Homeownership can also lead to other expenses, such as buying new furniture, upgrading appliances or home improvements, which can all contribute to less disposable income.  
Sometimes more affordable  

When renting, you only need to pay the first and last month of rent and sometimes a security deposit. Rent can sometimes cover the costs of utilities, hydro, cable and internet as well. Renting fees are typically much less compared to a mortgage down payment which makes renting an affordable option, especially when you don’t plan on living in the same area for long.


If you decide to rent instead of buy, you have the flexibility and freedom to move with ease. Once your set lease is over, you typically only need to give your landlord 60 days notice and can move without having any financial penalties unlike a mortgage. Renting is a good option for those who plan to move regularly due to school, work or other factors.

Less maintenance 

Some people prefer renting over buying because the responsibility for maintenance and broken appliances is for the homeowner or property manager. You can save lots of cash and time when you don’t have to deal with upkeep.
Landlord makes the decisions 

When you rent, you are living on someone else’s property and they get to call the shots. Landlords have the final say when it comes to renovations or changes to the home. They can also evict tenants within reason.


With renting there is always the possibility of eviction. Depending on the laws in your province, the landlord might also be able to increase the rent and the limits around how quickly they can increase can also vary. This could result in tenants suffering from financial issues and make it difficult to budget for retirement, if you plan to be a lifelong renter.

Not building equity

The money you pay each month is going towards paying off someone else’s mortgage and you won’t be able to build equity.
Closing costs 

Closing costs vary depending on the home, location and other factors. This can include lender fees, title insurance, and administration fees just to name a few. Generally, it is best to set aside 3-5% of your home’s purchase price aside to cover these costs.

Property taxes

When you own a home, you will have to pay property taxes to the provincial and municipal governments. These taxes will fund public services such as education, local police and more.

Homeowners insurance

This property insurance will cover the costs of interior or exterior damages, injuries that occur on your property and your personal assets within the property. Keep in mind that this doesn’t cover damages caused by the typical usage of your home.

Condo fees 

If you live in a condominium, there could be costs for special assessments and monthly maintenance fees associated with the upkeep of your unit. These fees can also go towards the amenities in your building, snow and garbage removal, common area repairs and more.
It’s important that you are familiar with your rights as a tenant if you choose to rent.

For example, in Ontario, the Landlord and Tenant Board is an adjudicative tribunal that provides dispute resolution of landlord and tenant matters under the Residential Tenancies Act. The Residential Tenancies Act is the law that governs relations between landlords and tenants and also specifies the maximum percent rent increase per year. Knowing your rights as a tenant in your province is important as landlord and tenant regulations vary across Canada. Some provinces have different rules that allow landlords to evict tenants for different reasons
Regardless of your decision of renting or buying a home, you will need to budget to achieve a financially stable lifestyle. A budget will allow you to meet your needs as well as achieve your goals. For example, you might get the house of your dreams but it’s far from the city and you’ll need to pay more for gas so you can commute to work. There is much more to it than a mortgage payment or monthly rental fee and having a financial plan for yourself is important. It’s also important to have an emergency fund for unexpected situations. Such as getting evicted on short notice or having your house flood. In short, having extra money is always a good plan.

If you are still unsure whether renting or buying is for you, speak to a Perch mortgage advisor today to learn more. If you decide to move forward with the home buying process, check out Perch’s Guide to Buying a Home to get access to free tools and resources that will help you along the way.

Yes. Our rent vs buy calculator is completely free to use, along with all of our other calculators, rate comparison charts and articles.

Perch makes money through mortgage commissions which is paid by the lender. We don’t accept fees from lenders in exchange for preferential treatment. We only offer mortgages from regulated, trusted Canadian financial institutions. It’s always free to sign up for a Perch account or to use tools and calculators provided by Perch.