Rent vs. Buy
Morty runs a 30-year projection to settle the debate — rent and invest, or buy and build equity?
Scenario Inputs
Market Assumptions
After 25 Years, Buying Wins by
$118,358
Buying breaks even at year 9
Buyer equity is net of $52,344 selling costs
Net Worth Projection
$994,545
$876,187
$2,167.00
P+I only
True Cost of Buying — What People Forget
Upfront Cash Required
$117,500
$100,000 down + $17,500 closing
Year 1 Ownership
$11,500
Maintenance + tax + insurance
Selling Costs at Exit
$52,344
5% of final home value
Monthly All-In
$3,125.00
Mortgage + ownership overhead
Morty notes: A lot of "rent vs. buy" calculators ignore closing costs, selling costs, and maintenance — making buying look better than it really is. I factor them all in so you get the real picture. Open the "Ownership Costs" panel on the left to dial in your local property tax rate and expected maintenance spend.
Pro tip: Closing costs in Canada typically run 1.5–4% depending on province. Ontario and BC have the highest land transfer taxes. And don't forget — when you eventually sell, the realtor takes ~5%. That $52,344 at exit is money you never see. The renter's portfolio? Fully liquid, no commission required.
Year-by-year net worth projection
Buyer equity is net of 5% selling costs. Renter portfolio is liquid.
| Year | Buyer net worth | Renter net worth |
|---|---|---|
| 0 | $100,000 | $117,500 |
| 1 | $98,428 | $136,534 |
| 2 | $122,682 | $156,243 |
| 3 | $147,791 | $176,654 |
| 4 | $173,787 | $197,794 |
| 5 | $200,702 | $219,693 |
| 6 | $228,569 | $242,381 |
| 7 | $257,425 | $265,889 |
| 8 | $287,304 | $290,252 |
| 9 | $318,245 | $315,504 |
| 10 | $350,286 | $341,681 |
| 11 | $383,468 | $368,822 |
- Home price: $500,000; down payment: $100,000
- Mortgage rate: 4.29% (semi-annual compounding, Canadian style)
- Starting monthly rent: $2,200.00
- Home appreciation: 3%/yr · Rent inflation: 3%/yr
- Renter investment return: 6%/yr
- Closing costs: 3.5% · Selling costs: 5% · Maintenance: 1%/yr · Property tax: 1%/yr · Insurance: $1,500/yr
- Projection horizon: 25 years
Frequently asked questions
- How does this rent vs buy comparison work?
- It projects year-by-year net worth for a buyer (home equity after selling costs) versus a renter who invests the same upfront cash and monthly cost difference. Defaults include appreciation, rent inflation, investment return, maintenance, property tax, and insurance.
- Why does the renter start with more cash invested?
- The model assumes the renter invests the full amount the buyer spends at closing (down payment plus closing costs). That levels the playing field on capital committed up front.
- Should I buy just because the model says buyer wins?
- No. Lifestyle, job mobility, local prices, and risk tolerance matter as much as the spreadsheet. Treat the projection as a scenario tool — stress-test lower appreciation or higher rates before deciding.
Related Tools & Resources
Affordability Calculator
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Mortgage Calculator
Full payment calculator with CMHC insurance and stress test.
Closing Costs Calculator
Estimate land transfer tax, legal fees, and more by province.
First-Time Buyer Guide
Everything you need to know about buying your first home in Canada.