Model the mortgage
A monthly Canadian mortgage payment and remaining balance are calculated using semi-annual compounding.
Specialized Financial Planning Calculators
Rent vs Buy Calculator Canada
Compare projected homeowner net sale equity with a renter investment portfolio after mortgage amortization, rent growth, ownership costs, appreciation, and transaction costs.
Monthly mortgage simulationRenter investment portfolioOwnership cost modellingProjected sale equity
Calculation inputs
Compare renting with buying over time
Project homeowner sale equity against a renter portfolio that starts with avoided upfront cash and receives the monthly cost difference.
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Ownership, transaction, and investment assumptions
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How the calculation works
Understand the formula before relying on the result
Model ownership costs
Mortgage payment, property tax, maintenance, insurance, and condo fees form the monthly ownership cash outflow.
Model the renter portfolio
The renter begins with the avoided down payment and purchase closing costs, then invests the monthly amount by which ownership costs exceed rent.
Compare ending net worth
Projected home value less selling costs and mortgage balance is compared with the renter's projected portfolio.
Interpret the result
The horizon matters
Buying has large transaction costs and may require time for equity growth and mortgage principal reduction to overcome them.
Assumptions drive the result
Small changes in appreciation, rent growth, maintenance, rates, or investment returns can reverse the outcome.
Lifestyle still matters
Mobility, housing control, repair responsibility, school plans, and space needs are not fully captured in a net-worth comparison.
Qualification is separate
A financially attractive buying scenario does not establish mortgage approval or cash-to-close readiness.
Common mistakes
- Comparing rent only with the mortgage payment.
- Ignoring maintenance, taxes, insurance, condo fees, and selling costs.
- Assuming a down payment has no investment opportunity cost.
- Using aggressive appreciation or investment returns without stress testing.
- Forgetting mortgage insurance and land transfer tax where applicable.
What lenders review
- Income, credit, down payment, closing funds, and stress-test qualification.
- Property taxes, heating, condo fees, and other housing costs.
- Source and history of down payment funds.
- Property type, appraisal, condition, and marketability.
- Post-closing liquidity and total debt obligations.
Planning tips
- Run five-, ten-, and fifteen-year horizons.
- Use a maintenance allowance appropriate for the property.
- Model flat home prices and lower investment returns.
- Add land transfer tax and mortgage insurance to closing assumptions where relevant.
- Use the Affordability and Down Payment calculators before treating buying as feasible.
Connected HopeWell knowledge
Connect the rent vs buy calculator to the mortgage decision
Use the result alongside HopeWell's guide chapters, glossary definitions, real underwriting case studies, service pages, and related calculators.
Calculation pathway
Related mortgage calculators
Continue into qualification, purchase costs, equity, refinancing, HELOC planning, and mortgage comparison using the connected calculators below.
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Mortgage Affordability Calculator Canada
Estimate a maximum purchase price using income, debts, down payment, housing costs, mortgage insurance, and qualification limits.
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Down Payment Planner Canada
Calculate the minimum and desired down payment, closing-cost reserve, projected savings, shortfall, and required monthly contribution.
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Ontario Closing Cost Calculator
Build a detailed cash-to-close estimate with taxes, legal fees, adjustments, insurance, and moving costs.
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Mortgage Payment Calculator Canada
Calculate payments, compare frequencies, model prepayments, review amortization schedules, and export a detailed PDF.
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Net Worth Calculator Canada
Build a personal balance sheet with total assets, liabilities, housing equity, liquid net worth, and leverage ratios.
Frequently asked questions
Questions about this calculation
Does buying always build more wealth?
No. The result depends on time horizon, property performance, mortgage cost, maintenance, transaction costs, rent, and the return earned on renter savings.
Why does the renter start with a portfolio?
A renter does not use the down payment and purchase closing costs, so the comparison assumes that avoided upfront cash can be invested.
How are monthly savings handled?
When modeled ownership costs exceed rent, the difference is added to the renter portfolio. When rent is higher, the portfolio may receive less or be drawn down.
Are taxes included?
The model is before tax and does not calculate investment tax, principal-residence treatment, capital gains, or tax deductions.
Does the result mean I can qualify?
No. Qualification, down-payment verification, stress testing, and property underwriting must be assessed separately.