Buy vs rent tool
Rent and invest the difference
The renting case in buy vs rent only works if the money not spent on a home is actually invested. This tool shows the renter’s portfolio year by year: the starting cash, the monthly contributions and the growth.
Example with default assumptions
After 10 years, buying finishes ahead of renting by about $41,686. On these assumptions buying overtakes renting after about 5.7 years, once selling costs are counted. The owner's first-month cash cost is $3,757, compared with $2,325 for the renter.
| Year | Home value | Mortgage balance | Buyer net worth | Renter net worth | Buying minus renting |
|---|---|---|---|---|---|
| 1 | $621,000 | $469,303 | $117,835 | $150,940 | −$33,105 |
| 2 | $642,735 | $458,120 | $149,966 | $176,418 | −$26,452 |
| 3 | $665,231 | $446,428 | $183,341 | $202,855 | −$19,514 |
| 4 | $688,514 | $434,203 | $218,008 | $230,289 | −$12,281 |
| 5 | $712,612 | $421,423 | $258,759 | $258,763 | −$4 |
| 10 | $846,359 | $348,248 | $460,065 | $418,379 | $41,686 |
Why discipline matters
The comparison assumes the renter invests every dollar they would otherwise have spent beyond rent. Real households do not always do that. Mortgages enforce saving; renting requires it to be chosen.
Registered accounts
Renters can use a TFSA, RRSP or FHSA, which tax-shelter growth. Set the tax drag to 0% to model a fully sheltered account, or higher for a taxable account.
Questions people ask
What does the renter invest at the start?
By default, the down payment and closing costs the buyer would have spent. You can turn this off.
What if renting costs more than owning?
Then the buyer invests the monthly difference instead. The model always keeps the two households’ total spending equal.
Does the portfolio include fees?
Enter a return net of investment fees. The tool applies only the tax drag you specify.
Educational estimates based on your inputs; not advice. See the methodology and assumptions.