Compare buying a home to renting and investing the difference. Tracks owner equity (home value minus mortgage minus selling costs) against the renter’s investment portfolio over your chosen horizon.
Future home value at 3.0 %/yr appreciation: $753,528
Modelled on the Felix/Solnik framework. Assumes Canadian semi-annual mortgage compounding, 1 %/year property tax, 1 %/year maintenance, 5 % selling costs (realtor + lawyer + LTT recapture). Renter is assumed to invest the down payment plus any monthly savings between rent and ownership at the chosen return. This is a financial-only comparison; it does not weigh non-financial factors (stability, freedom to move, control over the property, mortgage as forced savings). A small advantage either way often gets dwarfed by life circumstances.
Two paths to wealth
The owner’s wealth at the end of the horizon is the home’s future value (compounded at your assumed appreciation rate) minus the remaining mortgage balance and 5 % selling costs. The renter’s wealth is the original down payment compounded at the assumed market return, plus any annual savings (when ownership cost exceeds rent) also invested. The winner is whoever has more at the end.
Where the model is wrong
The model assumes renters actually invest the difference. In practice, behavioural finance research (Choi 2022, NBER) shows most renters don’t — the down payment gets spent on something else. Mortgages function as forced savings; renters who invest with the discipline this calculator assumes are uncommon. If you know you won’t actually invest the savings, the buy case looks meaningfully stronger.
Time horizon matters more than anything
Buy/sell costs (LTT, CMHC insurance on entry, 5 % realtor + lawyer + LTT recapture on exit) typically eat 7–10 % of home value. To break even on a purchase, you usually need to stay 5+ years; under 5 years, renting almost always wins financially.
This tool is for educational purposes only and does not provide medical advice, diagnosis, or treatment. Always consult a licensed Canadian healthcare professional. Read our full disclaimer.