Rent vs Buy Calculator 2026

Compare buying a home with renting and investing the difference, year by year, with your province’s land transfer tax and mortgage insurance. Every growth rate here is an assumption: change it to yours.

✓ 2026 rates · verified Oct 21–28, 2026

What this calculator compares

Two people with the same money: one buys a $500,000 home, the other rents and invests. On day one the buyer pays the down payment, land transfer tax and closing costs; the renter invests that same amount. Every month after that, whoever spends less on housing invests the difference. At the end, the buyer’s net worth is the home, less the mortgage and the cost of selling, plus anything they invested; the renter’s is their investments.

“Rent is throwing money away” leaves out half the picture. Owners also have costs they never get back, and in the first years most of a mortgage payment is interest. In the example, after 10 years the owner has paid $155,873 of interest alone.

The assumptions that matter most

The answer moves most with how fast home prices grow and what the renter’s investments return. With the defaults, after 10 years, buying leaves you $58,680 ahead. One point more or less on either assumption:

• Home prices grow 2% a year: Buy +$4,852
• Home prices grow 4% a year: Buy +$117,639
• Investments return 4%: Buy +$80,522
• Investments return 6%: Buy +$35,075

Costs people forget

• Maintenance: roofs, furnaces and appliances wear out. 1% of the home’s value a year is a common rule of thumb, not an official figure; older homes often need more.
• Closing costs: land transfer tax (none in Alberta, only land titles fees), legal fees, inspection and, with less than 20% down, CMHC insurance and in some provinces sales tax on it.
• Selling costs: real estate commission and legal fees, often several percent of the price. They come off the home’s value at the end.

Investing the difference

The comparison only works if the difference is actually invested. A TFSA keeps the renter’s growth tax-free, but the day-one amount alone ($103,000.00 here) may be more than a person’s TFSA room: someone 18 or older and in Canada every year since 2009 has $109,000 in 2026. Above that, choose “A taxable account”; the gain is then taxed when sold at the end, as a capital gain, with your other income and province.

Worked example

The defaults: a $500,000 home in Alberta with 20% down at 4.5% over 25 years, $3,000 of property tax, 1% maintenance, $1,200 of insurance and $2,000 of other closing costs, against $2,000 a month of rent. Homes and rent grow 3% a year and investments return 5% in a TFSA.

• Day one: $103,000.00 ($100,000.00 down + $3,000.00 of closing costs, including $1,000.00 of Alberta land titles fees). The mortgage payment is $2,213.89 a month.
• After 10 years: the home is worth $671,958.19 and $290,206.65 is still owed; less 5% selling costs, the owner’s equity is $348,153.63.
• The renter’s investments are worth $289,473.35.
• After 10 years, buying leaves you $58,680 ahead. Buying catches up in year 5.

What this calculator assumes

• One mortgage rate for the whole period (no renewals at different rates), with Canadian half-yearly compounding.
• The yearly investment return is compounded monthly at the equivalent monthly rate, (1 + yearly return)^(1/12) − 1, so a full year adds exactly the yearly return: 5% a year is 0.4074% a month. Home prices grow the same way; rent and the costs of owning step up once a year.
• No tax on the home when it’s sold (principal residence). In a taxable account, the whole gain is treated as a capital gain at the end.
• An insured mortgage (under 20% down) adds the CMHC premium to the loan; it can go to 30 years only for a first-time buyer or a newly built home (the December 15, 2024 rule).
• Moving costs, property tax changes beyond home price growth, and rent control aren’t modelled.

Rates for tax year 2026, verified October 21 to October 28, 2026 · Page updated October 28, 2026