Rent vs Buy Calculator | Iberian Pacific

Basic Assumptions

Purchase price ($)

Down payment

Monthly Rent ($)

Mortgage rate (%)

Amortization period

Ongoing Costs

Property tax (%/year)

Strata/Condo Fees ($/mo)

Home Insurance (Annual $)

Growth Assumptions

Home price growth (%/year)

Rent increase (%/year)

Investment return (%)

For illustration only. Not advice. All amounts in CAD. Mortgage interest is not tax-deductible for primary residences in Canada.

Verdict

Calculating...

After 5 Years

Timeline:

Avg. Monthly Outflow: $0

Includes $0 monthly mortgage payment*

Avg. Monthly Rent: $0

Includes 2.5% annual increase

*Calculated using the standard Canadian mortgage amortization formula (semi-annual compounding) assuming a 25-year total amortization.

Net Cost Over Time

Detailed Breakdown

Total Cash Outflow

Closing/Entry Costs

Equity / Invested Savings

Frequently Asked Questions

Why does the net cost of buying go negative over time?

It means buying has paid you back more than you spent. Early on, costs like interest, taxes, and maintenance add up. But over time, your equity grows and the home appreciates in value. By year 25 you own the asset outright — so buying actually built wealth instead of just costing money.

Why does rent keep going up while buying levels off?

Rent is gone the moment you pay it — no equity, no return. It also increases 2.5% every year with nothing to offset it. Your mortgage payment stays fixed and builds equity over time. That gap compounds significantly over 25 years.

What assumptions does this tool use?

Standard Canadian mortgage math with semi-annual compounding, a 25-year amortization, 2.5% annual rent increases, and your entered home appreciation rate. Results are illustrative and not financial advice.

Does this include investing the difference if I rent?

No — this compares costs directly. The "invest the difference" argument is worth exploring separately with an advisor, especially in high interest rate environments.

What costs are included for buying?

Mortgage interest, principal, property taxes, maintenance (1% of home value annually), insurance, and closing costs — offset by equity buildup and appreciation. Land transfer tax, legal fees, strata fees, and renovations are not included.

Is buying always the better choice long-term?

Not always. It depends on your timeline, the market, and your goals. Buying wins over long horizons in appreciating markets. Renting can make more sense if you need flexibility or have a shorter time horizon.