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Rent or Buy Calculator

Capture the costs associated with buying and owning a home, then calculate the equivalent monthly rent to help you decide if renting or buying is best for you.

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Home ownership

  • The total cost of your home, including sales taxes if it is a new construction, but not including any rebates or the cost of mortgage insurance.

    The purchase price does not include other taxes, such as land transfer, welcome, city or school taxes that may apply.

    $
  • The annual interest rate for the mortgage over your term, as quoted by your lender.

    Rates can be variable — where the interest rate can change throughout the term of your mortgage, or fixed — where your interest rate remains the same over the course of your mortgage term. The calculations in this tool are based on a fixed-term interest rate.

    Banks use a qualifying rate set by the Bank of Canada for anyone who is getting a variable rate or term less than five years. For fixed-rate mortgages of five years or more, the qualifying rate is the contract interest rate.

    You can estimate your mortgage rate using the qualifying rate, or the bank’s five year fixed term posted rate.

    %
    / month
  • The amount of money you will put towards the purchase of your home upfront that will not be covered by your mortgage.

    In Canada, the minimum down payment is 5% for properties up to $500,000 and 10% for the portion of the house price above $500,000. If the house price is above $1,000,000, a minimum down payment of 20% is required.

    Home purchases with down payments of less than 20% require mortgage insurance. The amount of mortgage insurance, if applicable, is calculated automatically and added to the total mortgage.

    %
  • The total length of time you will take to pay off your mortgage.

    The maximum amortization period is 30 years, and if your down payment is less than 20%, your maximum amortization will be 25 years.

    This differs from a mortgage term – a smaller period of time within the amortization where you are committed to a lender, certain conditions, and either a fixed or variable rate.

    years

Looking forward

  • The number of years you plan to stay in your home before reselling.

    years
  • The expected average annual change in the Fair Market Value of your home over the course of your planned stay.

    The Canada Mortgage and Housing Corporation (CMHC) forecasts an average growth rate of 1.3% in 2016, as reported in their Q4 2015 Housing Market Outlook – Canada Edition report.

    %
  • The expected average annual change in the cost of renting a similar home over the course of your planned stay.

    The average growth in rent in Canada for a two-bedroom apartment in 2015 was 2.9% according to CMHC’s fall 2015 Rental Market Report.

    %
  • The expected average annual after-tax return on your investments over the course of your planned stay. This tool calculates the opportunity cost (the difference between buying and renting) at this rate over the long term.

    Based on long-term historical averages and slower economic growth going forward, MD uses 4% to 5% as the expected long-term rate of return for a balanced portfolio (60% equity, 40% fixed income).

    %
  • The expected average annual inflation rate over the course of your planned stay. Over the last 10 years, annual Canadian inflation rates have averaged approximately 1.8%.

    %

Taxes

  • The amount of property taxes you expect to pay each year — as a percentage of the total Fair Market Value of your home.

    %
    / year
  • The amount of any land transfer taxes (LTT) you expect to pay at the time of home purchase. Depending on where you buy a home, you may have to pay a provincial/territorial LTT, a municipal LTT or both.

    Rates vary and are calculated differently in each province, territory and municipality, and some offer a tax refund to first-time buyers.

    $

Closing costs

  • The closing costs associated with a home purchase, such as home inspections, legal fees, notary fees and CMHC premium taxes (if applicable) — as a percentage of the total home purchase.

    Closing costs when buying a home typically range from 1.5% to 4%.

    %
  • The closing costs associated with a home sale, such as realtor commission and legal fees — as a percentage of the total home sale price.

    Closing costs when selling a home typically range from 5% to 6%.

    %

Additional home ownership costs

  • The average annual amount you may expect to spend on any maintenance, repairs or renovations to your home — as a percentage of the total Fair Market Value of your home.

    %
    / year
  • The amount you expect to pay each year in home insurance.

    Home insurance covers damage to your buildings, possessions or property; covers claims if you cause damage to someone else's property; and covers claims if someone gets injured or killed on your property.

    Rates vary and are calculated based on factors including the location of your home, proximity to emergency services, replacement cost for your home, the type of coverage you choose and security features, among other considerations.

    $/year
  • The monthly condominium/common/association fees you expect to pay, if applicable.

    $
    / year
  • The amount you expect to pay in mortgage insurance, in the event that your down payment is less than 20% of the total cost of the property itself. Mortgage insurance is a one-time cost and can be paid in one lump sum, but most homebuyers opt to add this to the mortgage principal and pay in instalments as part of regular mortgage payments.

    $0
  • Any other monthly expenses that are not included above. These may include utilities not covered in rent at the landlord’s discretion, such as water, heat or hydro.

    $
    / year

Additional renting costs

  • The amount that the landlord will hold as a security deposit over the course of your planned stay.

    months
  • The amount you expect to pay each year in renter’s insurance.

    $
  • Any other monthly expenses that are not included above. These may include costs such as parking or the use of laundry facilities.

    $
    / year
Renting is better if...
you can rent a similar home for less than:
/ MONTH
Rent Buy
Initial costs
Recurring costs
Opportunity costs
Net proceeds
TOTAL
Costs after years
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Assumptions
Mortgage rates are compounded semi-annually within this tool.

The calculations in this tool are based on a fixed-term interest rate.

This tool calculates the opportunity cost (the difference between buying and renting) at the expected investment rate over the long term.

This tool assumes that the home in question will be your principal residence, located in Canada, and as such it will qualify for the principal residence exemption, meaning that any increase in the Fair Market Value of this home will not be taxed when you resell in the future.

This tool also assumes that annual property taxes, insurance premiums, maintenance/repair/renovation/condominium fees, rental deposits and other costs associated with either renting or buying change with inflation. As such, the tool adjusts values annually following what is entered as the rate of inflation over the course of a 30-year period.

The average inflation rate is based on historical changes in the Consumer Price Index, Statistics Canada, CANSIM, table 326-0021 and Catalogue nos. 62-001-X, 62-010-X and 62-557-X.

This tool calculates mortgage insurance premiums (if applicable) as part of the mortgage, not as a one-time lump-sum payment.

CMHC mortgage insurance premiums listed within this tool are current as of June 1, 2015.

The average changes in home value and rent listed within this tool are based on CMHC’s Housing Market Outlook – Canada Edition and Rental Market reports, and are current as of fall 2015.

This tool rounds to the nearest dollar.

Disclaimer
Banking products and services are offered by National Bank of Canada through a relationship with MD Management Limited. Credit and lending products are subject to credit approval by National Bank of Canada.

The information presented here is not intended to offer foreign or domestic taxation, legal, accounting or similar professional advice, nor is it intended to replace the advice of independent tax, accounting or legal professionals. Incorporation guidance is limited to asset allocation and integrating corporate entities into financial plans and wealth strategies. Any tax-related information is applicable to Canadian residents only and is in accordance with current Canadian tax law including judicial and administrative interpretation. The information and strategies presented here may not be suitable for U.S. persons (citizens, residents or green card holders) or non-residents of Canada, or for situations involving such individuals. Employees of the MD Group of Companies are not authorized to make any determination of a client’s U.S. status or tax filing obligations, whether foreign or domestic. MD Financial Management provides financial products and services, the MD Family of Funds and investment counselling services through the MD Group of Companies. MD Financial Management Inc. is owned by the Canadian Medical Association.