Rent vs Buy Calculator

Should You Rent or Buy a Home in Canada in 2026?

With home prices elevated and mortgage rates between 4–5%, the age-old question of renting vs. buying has never been more nuanced. This calculator helps you compare both scenarios using real Canadian tax rules, including the principal residence capital gains exemption for buyers and the 50% capital gains inclusion rate for investment returns.

What This Calculator Accounts For

• Canadian semi-annual compounding — mortgage interest calculated the way Canadian lenders actually compute it
• Principal residence exemption — homeowners pay zero capital gains tax on their primary residence appreciation
• Opportunity cost of the down payment — tracks what your down payment would grow to if invested instead
• Monthly savings differential — if renting costs less than owning, the difference is invested monthly
• Rent inflation — models realistic annual rent increases
• Capital gains tax on investments — uses the 50% inclusion rate at your marginal tax rate

Key Factors That Tip the Scale

Buying tends to win when appreciation is strong (4%+), your time horizon is long (15+ years), leverage amplifies gains, and you wouldn't have invested the difference anyway. Renting tends to win when the price-to-rent ratio is high (25x+), you have a short time horizon, investment returns are strong, and you're disciplined about investing savings.