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Renting & investingvsBuying & building equity
This rent vs buy calculator was created specifically for British Columbia residents to help us understand the financial implications of renting vs buying, as well as compare buying scenarios. Incredibly, the top 10 calculators in Google search all fail to model this vital calculation accurately!
The calculator attempts to balance simplicity while maximizing accuracy and uses an apples-to-apples model: whichever path is cheaper in a given year automatically invests the leftover cash, prioritizing your tax-free (FHSA and TFSA) accounts first.
Some inputs are impossible to predict, like the expected rate of return on your property compared to investing, but the calculator will help you make grounded estimates.
By using the calculator you'll learn how certain inputs can have a big impact on the result, sometimes in unexpected ways. For example, what is the optimal down payment percentage? Exactly how do strata fees impact your buying power? Is an older home with high maintenance requirements better than a condo, considering home appreciation vs condo appreciation? What are the effects of cancelling a mortgage early? When is the optimal time to sell? When does a loaded FHSA account change the equation in favor of buying?
If your buy decision is mostly lifestyle motivated, this calculator will help you compare scenarios (compare multiple buy options vs a fixed baseline rental position) which will show you the relative price of the lifestyle upgrades.
Inputs
Entry costs & purchase assumptions
—
Monthly housing costs
BC's 2026 max for existing tenancies
For the rent scenario only.
CRA annual limit: $8,000
After this point, new FHSA contributions stop.
New renter FHSA contributions are modeled in a
simplified way: shelter first, then TFSA, then
taxable. This does not separately recycle the income
tax refund created by new FHSA deductions.
Applies the 2026 threshold/phase-out automatically;
still assumes you otherwise qualify and apply.
—
Available room only.
CRA's 2026 limit: $7,000
Applies only when New build = Yes and Add GST on top = Yes.
Saved scenarios
No saved scenarios in this browser yet — save one above, or
import a backup file below.
Saved scenarios live only in this browser on this device.
They aren't synced across devices, and some browsers
(notably Safari on iPhone/iPad) may clear them after about
a week of inactivity. Use Export backup to
keep a copy you can re-import anytime.
This is not tax/legal advice. Use it for scenario
exploration, not as a substitute for a professional.
Results
Net worth at horizon
Break-even year
Upfront cash to buy
This exact amount is invested on day 1 in the rent
scenario.
Annual cashflow delta: this is
rent cost minus buy cost. If the number is
positive, buying was cheaper that year and the buyer invests
the extra cash. If the number is negative, renting was cheaper
and the renter invests the extra cash.
Year
Renting net worth
Buying net worth
Annual rent − buy cashflow
1) The Golden Rule (Apples-to-Apples): To make
a fair comparison, the calculator assumes the Renter
and the Buyer start with the exact same amount of cash
and spend the exact same amount each month.
• Upfront Cash: The Renter takes the money the
Buyer would have used for a down payment and closing
costs, and puts it into investments.
• Monthly Cashflow: Every year, the calculator
compares total cash outflow for renting (rent + tenant
insurance) against total cash outflow for owning
(mortgage payment, property tax, strata, maintenance,
insurance, and any modeled HBP repayment). Mortgage
principal is included as a cashflow because it affects
how much cash the buyer has available to invest, but it
is later reflected in the buyer's home equity. Whoever
has the cheaper housing costs that year takes the extra
cash and invests it.
2) Investment Accounts (Where the money grows):
When investing extra cash, the calculator prioritizes
your tax-free accounts first.
• Renter: Fills available FHSA room, then TFSA,
then puts the rest into a regular taxable investment
account.
• Buyer: Fills available TFSA room, then puts
the rest into a regular taxable investment account.
3) Taxes on Investments: TFSA accounts grow
tax-free. FHSA balances grow tax-free until the modeled
FHSA closure year; after that, the balance is either
treated as a tax-free qualifying withdrawal or rolled
into an RRSP-like taxable bucket depending on your FHSA
setting. For regular taxable accounts, the calculator
assumes you receive a small payout each year (the
"Taxable yield", like stock dividends) which is taxed
immediately at your marginal rate. The rest of the
growth is considered a "capital gain" and is only taxed
at the very end of your timeline when you cash out.
4) Your Existing Savings: If you plan to use
money already sitting in an RRSP (Home Buyers' Plan),
FHSA, or TFSA for your down payment, the "Renting"
scenario leaves that money invested in the comparable
registered account. If you use RRSP money to buy, the
calculator models equal annual HBP repayments over 15
years starting in Year 2, and adds those repayments
back to the buyer's RRSP balance. Because the HBP is
effectively an interest-free loan from yourself, any
part of the withdrawal still un-repaid at the end of
your timeline is treated as a deferred tax liability:
the calculator applies your marginal tax rate to that
outstanding balance at the final "sell everything"
snapshot. This keeps the comparison fair — the
renter's RRSP money is taxed when withdrawn, so the
buyer's pre-tax dollars that left the RRSP and became
tax-free home equity are charged the same exit tax.
For timelines of 16 years or longer the HBP is fully
repaid, so this adjustment is zero; it matters most
for shorter horizons.
5) Home Value & Selling: Your home's value
grows each year completely tax-free (assuming it's
your primary residence). However, the final "Buying
net worth" assumes you sell the home at the end of the
timeline, meaning real estate commissions and legal
fees are subtracted from your final equity to give a
true "cash in hand" comparison. If the mortgage
breaking penalty option is set to Auto and the sale
year doesn't land exactly on a mortgage renewal date,
an estimated prepayment penalty (3 months' interest
for variable-rate mortgages; an IRD-based estimate
for fixed) is also subtracted — including in each
year's "what if you sold now" snapshot, which is why
the buying line can dip slightly between renewal
years.
6) B.C. Taxes & Grants: We automatically
calculate B.C.'s Property Transfer Tax (PTT) based on
current rules, including partial and full exemptions
for First-Time Buyers and New Builds. We also apply
the selected B.C. Basic Home Owner Grant, including the
2026 threshold and phase-out, and can apply the federal
first-time buyer GST rebate for eligible new-build
purchases when GST is added on top of the price.
7) What this doesn't include: This is a
long-term planning tool, so it simplifies a few
things. It does not account for moving costs, major
one-off renovations, special strata levies, changes in
mortgage rates over time, or refinancing. It assumes
your scheduled HBP repayments are made on time up to
your sale date and taxes any remaining balance at a
flat marginal rate (rather than as income spread over
the remaining repayment years), and it ignores the
specific income tax refunds you get when contributing
new money to an RRSP or FHSA.
What does "marginal tax rate" mean?
Canada taxes your income in layers, like a staircase. The first chunk
of income is taxed at a low rate, the next chunk at a higher rate, and
so on. Your marginal tax rate is the combined federal
+ BC rate charged on your top layer — the tax you'd
pay on one more dollar of income. It is always higher than the
average rate you pay across all your income, so don't use
your "effective rate" from a tax return here.
Roughly: salary + other income − RRSP contributions. If you're not
sure, your gross salary is close enough.
Combined marginal rate (2026)
—
Show the full 2026 BC bracket table
Taxable income
Marginal rate
Combined federal + BC rates on regular income for 2026 (source:
TaxTips.ca). Capital gains and dividends are taxed differently — the
calculator already handles that.
Which rate should I enter — today's, or retirement's?
Use your current marginal rate. The calculator taxes
your yearly investment income (dividends/interest) as you go — that
happens at today's rate — and it applies the same single rate to both
the renting and buying scenarios, so the comparison stays fair either
way. One nuance: if your time horizon ends deep into retirement, when
your income (and rate) will likely be lower, you can re-run the
calculator with a rate a few points lower to see the sensitivity. Don't
overthink it — consistency matters more than precision here.
Where the calculator uses this number
Tax on the yearly dividends/interest in your regular (non-registered)
investment account.
Capital gains tax when investments are cashed out at the end of your
time horizon.
The exit tax on RRSP-style money (including an FHSA that rolls over,
and any unrepaid Home Buyers' Plan balance).
Couples: use the marginal rate of the partner whose
name the investments would be held in — or run a scenario for each.
What this input controls
This is the yearly percentage increase applied to your
strata fees, home insurance, and
other owner costs (it's also applied to tenant
insurance on the renting side). Property tax and maintenance are
not driven by this input — they automatically grow with your
home's value instead.
Why BC owner costs outpace general inflation
General inflation (CPI) is around 2%, but the costs of running a home
in BC have been rising much faster:
Strata insurance shock: premiums for BC strata
buildings climbed roughly 40% between 2020 and 2024, and were still
rising about 6% per year in 2025. Insurance now eats 25–40% of the
budget in many older buildings, and most of a strata's insurance bill
flows straight into your monthly fee.
Mandatory depreciation reports: BC now requires
stratas to complete depreciation reports every 5 years. Buildings
that under-saved for decades are catching up by raising fees to fund
their contingency reserves.
Construction cost inflation: repairs, rebuild values
(which drive insurance premiums), and trades labour have all been
rising faster than CPI.
Aging building stock: much of Metro Vancouver's
condo stock is now 30+ years old, entering its expensive decades
(envelope, plumbing, elevators, roofs).
Industry observers expect Metro Vancouver strata fees to keep climbing
roughly 4–8% per year in the near term.
What to enter
A reasonable long-run default is 5% for condos and
townhouses (strata dynamics dominate) and about
4% for detached homes (insurance still runs hot, but
there's no strata fee compounding). Using plain CPI (~2%) will
meaningfully understate the true cost of owning in BC.
Why this tiny number matters so much
Maintenance is charged every year on your entire home value,
and it compounds as the home appreciates — so a difference of just
0.25%/yr quietly moves tens of thousands of dollars over a 20+ year
horizon. It deserves a real estimate, not a shrug.
What counts as maintenance
Everything you pay to keep what you own working: appliances, paint,
flooring, plumbing fixtures, hot water tank — plus, for houses, the
big-ticket items renters never think about: roof (~$15–30k), furnace
and heat pump, windows, perimeter drainage, decks and fences. For
condos, the strata maintains the building itself (you pay for that
through strata fees), so your maintenance number only needs to cover
the inside of your unit — but it should also absorb the risk of
special levies, which is real in older buildings.
Suggested maintenance
—
One BC-specific caveat
For expensive detached properties, most of the price is
land — and land doesn't need a new roof. If you're buying a
$2M+ house on a valuable lot, the percentages above can overshoot;
consider estimating what the structure would cost to maintain
and converting that back to a percentage of the full price. When in
doubt, err slightly high: almost everyone underestimates maintenance.
Condo vs detached: very different policies
For a condo or townhouse, the strata insures the
building itself — your policy only covers your belongings, interior
upgrades, personal liability, and
loss assessment coverage (your share of the strata's
deductible if there's a building-wide claim). That's why condo
insurance is dramatically cheaper. For a
detached house, you insure the full rebuild cost of
the structure plus contents and liability.
What moves the price in BC
Earthquake coverage — the big BC wrinkle. On the
south coast (Metro Vancouver, Victoria, the Island) it's an optional
rider with its own large percentage deductible, and it adds
meaningfully to the premium. Whether to carry it is a real decision.
Wildfire & water — interior regions (Okanagan,
Thompson-Nicola, Cariboo) can see higher premiums; overland flood
and sewer backup are often optional add-ons.
Age of the home — old roofs, knob-and-tube wiring,
poly-B plumbing, and oil tanks raise premiums or block coverage.
Updates lower them.
Ballpark annual premiums
Property
Typical range / yr
Condo / townhouse (contents + liability)
$300 – $700
Typical detached home
$1,200 – $2,500
Larger / older / higher-risk area
$2,500 – $4,000+
The most reliable number is a real quote for a comparable property —
bundling with auto and raising your deductible both bring it down. Use
the ballparks until you have one, then come back and refine.
Why this input dominates
Growth compounds on your entire home value every year, and
for a principal residence the gain is generally
tax-free in Canada. One extra percentage point
sustained over 20–25 years changes the outcome by six figures — which
is exactly why it deserves a conservative, defensible number rather
than a hopeful one.
Condos and detached homes don't grow the same way
Over the long run, detached homes in BC have
generally appreciated faster than condos, for a structural reason:
most of a detached home's value is scarce land. A condo is
mostly building — it physically ages, new supply can always
be built next door, and rising strata fees weigh on resale. Condos
still appreciate, typically just more slowly. Modeling a condo a
little below a detached home is reasonable.
What history says — and its limits
BC real estate has delivered strong multi-decade appreciation, but in
cycles: the 2020–2022 low-rate surge was followed by a 2022–2024
correction as rates rose. Short-term prices hinge on rates,
immigration, supply, and policy — none reliably predictable. Long-run
averages are a better planning basis than any recent streak.
Pick a stance
Stance
Nominal / yr
Conservative
1% – 2%
Moderate (≈ inflation or a bit above)
2% – 4%
Optimistic
4% – 5%+
The most useful habit: run a low, base, and high case and watch the
break-even year move. If buying still wins at your conservative
number, that conclusion is robust. Educational information, not a
forecast.
Why it matters
Whenever renting is cheaper in a given year, the calculator invests
the difference — so this rate powers the entire "rent and invest"
side. Together with home price growth, it's one of the two inputs
that decide the outcome, and the two should be set on a consistent,
realistic footing.
Anchor in history, plan below it
Over many decades, broad stock markets have returned roughly
10%/yr nominal (about 6–7% after inflation) — the
S&P 500 being the classic example, with globally diversified
portfolios in a similar ballpark. That average includes brutal
decades, so for planning it's wise to assume something
below the headline number.
Match the rate to your portfolio and horizon
Approach
Planning rate / yr
Aggressive, long horizon (mostly equity ETFs)
6% – 8%
Balanced (stocks + bonds)
4.5% – 6%
Conservative / short horizon (bonds, GICs)
2.5% – 4%
Three quiet return-killers
Fees — high-fee mutual funds can eat 1–2%/yr.
Enter your return net of fees; low-cost index ETFs keep
the drag small.
Taxes — the calculator already routes rent-side
savings into FHSA/TFSA room first, which is the right order in real
life too.
Behaviour — the assumed return only holds if you
stay invested through downturns.
Avoid pairing an optimistic stock return with a pessimistic home
growth number (or vice-versa) — that quietly biases the whole
comparison. Educational information, not investment advice.
The 30-second refresher
Inside a Tax-Free Savings Account, investments grow
completely tax-free and withdrawals are never taxed — and don't count
as income, so they don't claw back benefits. Contribution room starts
accumulating automatically at 18 (from 2009 onward), whether or not
you've ever opened an account.
The 2026 numbers
Limit
Amount
New room added for 2026
$7,000
Total room if you turned 18 by 2009 and never contributed
$109,000
The rule most people miss
When you withdraw from a TFSA, that amount is
added back to your contribution room on January 1 of the
following year — you never permanently lose room. Withdraw
$20,000 for a down payment this year, and next January you can
recontribute the full $20,000 on top of the new annual limit. One
caution: recontributing in the same calendar year without
spare room triggers a CRA over-contribution penalty of 1% per month.
What to enter here
Your currently available, unused room — not the money
already sitting inside your TFSA. The exact figure is in your
CRA My Account under "Savings and pension plans"
(note: CRA's number only updates once a year, so subtract anything
you've contributed since January).
Most people are somewhere in between — a rough estimate is fine, but
the CRA figure is worth looking up since unused room can be
surprisingly large.
Fixed vs variable vs adjustable — the 60-second version
Fixed: your rate is locked for the term (usually 5
years). Total certainty until renewal — but the biggest penalties if
you break the mortgage early (see below).
Adjustable (ARM): your rate floats with the Bank of
Canada via your lender's prime rate, and your
payment changes when rates change.
Variable (VRM): the rate also floats, but your
payment stays the same — instead, the split between interest
and principal shifts. If rates rise a lot you can hit your "trigger
rate," where the payment no longer covers interest and the bank
steps in. Banks use these labels loosely, so always ask which one
you're being offered.
What number to enter
This calculator holds one rate for your entire time horizon, so enter
an expected average, not today's promotional rate. As
of mid-2026, 5-year fixed rates are roughly 3.9–4.3% and variable
rates roughly 3.3–3.6%, with the Bank of Canada holding at 2.25%.
Today's rates are near the bottom of the recent cycle — over a 20–30
year horizon you'll renew several times through higher and lower
cycles, so adding 0.25–0.75% to today's 5-year fixed
rate is a prudent long-run average. That's why the default here is
4.6%.
Why variable looks attractive in BC right now
Variable currently prices ~0.6% below fixed, the Bank of Canada is
expected to hold or cut rather than hike, and the academic evidence
(famously Moshe Milevsky's studies) shows variable beat fixed in the
large majority of historical 5-year windows in Canada. Just as
important: variable-rate penalties are capped at ~3 months' interest,
so you keep flexibility if life changes. Fixed is still the right call
if a payment increase would genuinely strain your budget — certainty
has value.
How to negotiate a good rate
Never accept the posted rate. The big banks'
posted rates are 1.5–2% above what they'll actually do.
Get quotes from a mortgage broker and at least one
monoline lender (First National, MCAP, etc.) — then
let your bank match. Monolines also calculate breaking penalties far
more fairly.
Ask for a rate hold (90–120 days) while you shop —
it's free insurance against rising rates.
At renewal, never sign the first offer letter;
start shopping 4–6 months before your term ends.
Counterintuitively, buyers with less than 20% down often get
lower rates, because the mortgage is insured and risk-free
to the lender.
Breaking your mortgage costs money
If you sell mid-term, variable mortgages charge ~3 months' interest,
while fixed mortgages charge the greater of 3 months' interest or the
"Interest Rate Differential" — which at a big bank can be tens of
thousands of dollars. This calculator can model that cost: see the
Mortgage breaking penalty input near the top, and
click its label for the full story.
What it is
The First Home Savings Account combines the best of an RRSP and a
TFSA: contributions are tax-deductible (like an
RRSP), and withdrawals for a qualifying first home — including all
growth — are completely tax-free (like a TFSA). You
can contribute up to $8,000 per year, to a
$40,000 lifetime maximum, and each partner in a
couple gets their own limit.
Haven't contributed yet? Read this
Room only starts accruing once you open the account.
Unlike a TFSA, no room piles up for the years before you opened it —
there is no catch-up for pre-opening years.
In the calendar year you open it, the most you can put in is
$8,000.
Unused room carries forward, but only up to $8,000 — so the most you
can ever contribute in a single later year is
$16,000 ($8,000 new + $8,000 carried forward).
Practical takeaway: open one now, even with a small
deposit, if there's any chance you'll buy a first home someday. An
account opened this year means $16,000 of room next year.
Other rules worth knowing
The account can stay open 15 years (or until age 71, or the year
after your first qualifying withdrawal, whichever comes first).
If you never buy, nothing is lost: the balance transfers into your
RRSP tax-deferred, without using up any RRSP room.
The deduction can be saved for a future, higher-income year — often
worth doing early in your career.
How this input works in the calculator
"From FHSA" is money already in your FHSA that you'd put toward the
down payment if you buy. In the renting scenario, that money stays
invested in the FHSA instead. Your available contribution
room is handled separately by the "FHSA room today" and "New
FHSA/year" inputs below it.
When does this happen?
A mortgage is a contract for a fixed term (usually 5 years). If you
sell the home, refinance, or switch lenders before the term
ends, the lender charges a prepayment penalty. Since most people's
plans change more often than every 5 years, this is a real cost of
ownership — one that almost no rent-vs-buy calculator models.
How the penalty is calculated
Variable rate: almost always
3 months' interest — your balance × your rate ÷ 4.
On a $500,000 balance at 4%, that's about $5,000. Painful but
predictable.
Fixed rate: the greater of 3 months'
interest or the Interest Rate Differential (IRD) —
roughly, (your rate − the lender's current rate for your remaining
term) × your balance × the years left in the term. The catch: the
Big Six banks compute IRD from their inflated posted rates,
which can make penalties 3–10× larger than the same
break at a fair-penalty lender. Penalties of $20,000–$40,000 are not
rare.
How this calculator models it
With the penalty set to Auto, every year's "sell
everything" snapshot checks whether that sale year lands on a renewal
date (a multiple of your term). If it doesn't, a penalty is subtracted
from the buyer's proceeds: 3 months' interest for variable, or
max(3 months' interest, balance × IRD gap × years left in term) for
fixed. You may notice the buying line dip between renewal years —
that's realistic.
Can you avoid it?
Sell exactly at renewal: works on paper, but in
practice you rarely control the timing — the right buyer, a job
move, or a growing family won't wait for your renewal date. Treat
penalty-free timing as a bonus, not a plan.
Port the mortgage: if you're buying another home at
the same time, most lenders let you carry the mortgage to the new
property penalty-free — but you must requalify, the closing dates
have to line up, and porting a bad rate isn't always worth it.
Blend and extend: refinancing with your existing
lender folds the penalty into a new blended rate instead of charging
cash — convenient, but the penalty is still in there.
Use prepayment privileges first: most mortgages let
you prepay 10–20% per year penalty-free; doing so right before
breaking shrinks the balance the penalty is computed on.
Choose flexibility upfront: if there's a real
chance you'll sell mid-term, a variable rate or a shorter term is
the honest fix — you can't negotiate your way out of a posted-rate
IRD after signing.
Bottom line: if your time horizon isn't a multiple of
your term, leaving this on Auto gives you a more truthful picture of
the cost of selling.
