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Canada Renting vs Buying Guide

the renting vs buying decision in Canada. The 5% rule — the "buy the home if the annual rent is more than 5% of the purchase price" — the "5% represents the approximate annual cost of ownership (the property tax at 1%, the maintenance at 1%, the cost of the capital at 3%)". The upfront cost of buying: the "down payment (5% to 20%)", the "land transfer tax (1% to 3% of the purchase price)", the "CMHC insurance (0.6% to 4.0% for the down payment below 20%)", and the "legal fees ($1,000 to $3,000)". The down payment calculator: the "CMHC mortgage qualifier tool". The Canadian average home prices (2025): the "Toronto at $1,150,000", the "Vancouver at $1,250,000", the "Montreal at $550,000", the "Calgary at $580,000", the "Ottawa at $650,000", and the "Halifax at $480,000".

Upfront Costs of Buying

• Down payment: 5% on the first $500,000 and 10% on $500,000-$1,000,000 (the "minimum down payment"). 20%+ for the properties above $1,000,000 (the "no CMHC insurance requirement").
• Land transfer tax: The "Ontario LTT: 0.5% to 2.5% of the purchase price". The "Toronto MLTT: the additional 0.5% to 2.5%". The "BC PTT: 1% to 10%". The "Quebec transfer tax: up to 3%". The "first-time home buyer rebates: Ontario up to $4,000, BC up to $8,000".
• CMHC insurance: The "default insurance premium for the high-ratio mortgage (the down payment below 20%)". The "premium: 4.0% for the 5% down payment, 1.7% for the 15% down payment".
• Legal and the closing costs: The "lawyer fee: $1,000 to $3,000". The "home inspection: $500 to $800". The "property appraisal: $300 to $500". The "title insurance: $200 to $500". The "moving costs: $500 to $2,000".

Monthly Cost Comparison

• Mortgage payment (the $500,000 home, the 5% down, the 4.5% rate, the 25-year amortization): The "monthly payment: approximately $2,625".
• Property tax: The "0.5% to 1.5% of the assessed value" — the "$500,000 home: $250 to $625 per month".
• Home insurance: The "$1,000 to $2,000 per year" — the "$85 to $170 per month".
• Maintenance reserve: The "1% of the home value per year" — the "$500,000 home: $5,000 per year ($415 per month)".
• Total monthly cost of ownership: The "approximately $3,375 to $3,835 per month for the $500,000 home".
• Rent for the comparable property: The "approximately $1,800 to $2,500 per month for the 2-bedroom apartment".

Qualitative Factors

• Buying advantages: The "build the equity over time", the "stability and the security", the "freedom to renovate", the "forced savings through the mortgage payment".
• Renting advantages: The "flexibility to move", the "no maintenance cost", the "no property tax", the "lower monthly cost", the "investment diversification (the down payment can be invested in the market)".

For the mortgages and the mortgage qualification, see our Mortgages Guide →. For the first-time home buyer programs, see our First-Time Home Buyer Guide →.