Rent versus buy
Your horizon: 10 years
Buying is not better or worse in the abstract. The break-even year is the only number that decides it, and your horizon is what it is measured against.
The break-even is the only number that matters here.
| Hold for | Buy wealth | Rent wealth | Advantage of buying | Winner |
|---|---|---|---|---|
| 3 years | $74,197 | $135,324 | − $61,127 | Rent |
| 5 years | $121,303 | $189,850 | − $68,547 | Rent |
| 10 years · Your horizon: 10 years | $253,934 | $347,867 | − $93,933 | Rent |
| 15 years | $410,949 | $542,785 | − $131,836 | Rent |
| 25 years | $817,247 | $1,081,122 | − $263,875 | Rent |
| 40 years | $1,559,838 | $2,272,610 | − $712,772 | Rent |
Capital deployed up front $61,586 · mortgage $422,329 at 3.94% · payment $1,994 a month
What each side actually pays out each year. Past the payoff year the mortgage payment stops and owner outlay drops — which is exactly where the buy line steepens.
Capital deployed up front is the down payment plus closing day's bill, itemised on the closing-costs page.
Rent · at year 10
Terminal wealth, both ways. Equity is net of selling cost, because wealth you cannot realise without paying an agent is not wealth you have.
On: whichever side pays less each month banks the difference and invests it. This is the honest comparison, and the factor most calculators quietly omit.
On: you are forecasting the housing market, which nobody does reliably. Growth is applied to value, property tax and maintenance alike.
Both sides — 4 favour buying, 3 favour renting.
Every model leaves things out. These are the ones that matter, named rather than buried, on both sides.
Not captured, and these favour buying
- In Canada, gains on a principal residence are 100% tax-free. Investment gains are not. If the return above is a pre-tax figure, this comparison is unfairly tilted toward renting.
- Forced savings. A mortgage payment is compulsory; investing the difference is optional, and most people do not sustain it for ten years. The model assumes perfect discipline from the renter.
- Security of tenure, freedom to renovate, and no landlord risk. Real, but not financial.
- A mortgage is leverage. You control the whole asset having put down a fraction of its value.
Not captured, and these favour renting
- Liquidity and mobility. Selling costs roughly 5% and takes months.
- Concentration risk. A house is one undiversified asset in one city.
- Special assessments, major repairs, and the risk that maintenance exceeds the 1% a year reserve.
Adjust your numbers
Every figure that carries a sourcing record names where it came from: a dated published source, an estimate we disclose, or nothing at all where nothing is published.
Rules last verified 2026-08-24