The Bureau
Oakwyn Realty Ltd.

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Rent vs buy calculator

Comparing rent to a mortgage payment tells you almost nothing. This compares the net worth each path leaves you with.

If you buy

$
$

20.0% of the price

%
Amortization

If you rent

$
%

BC caps the allowable increase for existing tenants. The province sets it each year

$

Cost of owning

$
$
$
%

Of home value. 1% is the standard rule of thumb; strata owners often assume less

The assumptions that decide it

%

Per year

%

What the down payment would earn invested instead

yrs

After 7 years

Buying by $23,220

Comparing the net worth each path leaves you with

BuyingRenting & investingDashed line marks the crossover
Buying: net worthHome value, less mortgage and the cost of selling$555,890
Renting: net worthInvested down payment plus monthly savings$532,670
Difference+$23,220

The number that decides it

3.69% a year

Buying wins if this home appreciates faster than 3.69% annually, given a 6% return on invested cash. You are currently assuming 4%.

Rather than pretending anyone can forecast a price, this is the threshold your own view has to beat.

Where the money goes

Cash needed up front to buyDown payment plus $19,100 in closing costs$199,100
Home value after 7 years$1,184,339
Mortgage still owing$591,135
Cost of sellingCommission, GST on it, and legal fees$37,314
Total rent paid over the period$279,621
Buying pulls ahead in month 60, about 5.0 years in. Before that, the cost of buying and selling outweighs the equity you build.
This assumes a renter actually invests the difference, including the full down payment and closing costs, and earns the return above. Most people do not, which is a genuine argument for buying that this model cannot capture. Uses BC closing and selling costs as of 2024-04-01; taxes on investment returns are not modelled.

Still weighing it up?

We will talk you through what buying looks like in your specific situation. No pressure either way.

FAQ

Common questions

It depends almost entirely on how long you stay and how fast prices grow. Buying carries large one-time costs at both ends — Property Transfer Tax going in, commission and GST coming out — so short horizons favour renting. This calculator reports the appreciation rate at which buying overtakes renting, so you can judge it against your own view.

A mortgage payment builds equity and rent does not, but owning also carries property tax, strata fees, insurance, and maintenance a renter never pays — and a renter can invest the down payment instead. Comparing the two monthly figures ignores all of that. Net worth at the end of the period captures it.

The annual home-price growth at which buying and renting leave you equally well off. Above it buying wins, below it renting wins. Because nobody can forecast prices, the threshold is more useful than any single projection.

Yes — the full down payment, closing costs, and any monthly savings, at the return you set. Most renters do not actually do this, which is a real argument for buying as forced savings that this model cannot capture.

Roughly 3 to 5% of the sale price. Commission on the Greater Vancouver graduated schedule is 7% of the first $100,000 plus 2.5% of the balance, GST applies on top of that, and legal fees and any mortgage penalty come off as well.

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