Rent vs Buy Calculator
In Toronto, the question isn't simple. Buying builds equity but ties up a large down payment and carries costs most people underestimate. This calculator runs the real 5-year numbers for both scenarios side by side.
Buying
Toronto long-run average is roughly 4-6% but past performance doesn't predict future returns.
Renting
Ontario rent increase guideline is typically 2-3%.
If you rent instead of buying, what return would you earn investing the down payment?
Buying — 5-year net cost
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Renting — 5-year net cost
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Why the Toronto rent vs buy question is complicated
At Toronto's price-to-rent ratios, buying rarely makes sense on a pure monthly cash flow basis. A $900,000 condo that rents for $3,200/month costs significantly more per month to own — once you add mortgage interest, property tax, maintenance, and insurance — than it does to rent. The argument for buying is property appreciation, forced savings through equity buildup, and protection from rent increases over a long time horizon.
The argument for renting is opportunity cost. The $200,000 down payment invested in a diversified portfolio at 6% per year grows to $267,000 over five years. When you buy, that capital is locked up in an illiquid asset. Whether the property appreciates more than a diversified portfolio over your specific holding period is genuinely unknowable in advance.