Buying
CMHC insurance required
~1% of home value/year is typical across Canada
% of home value per year
Affects land transfer tax calculation
Renting
Investment Return
Return earned by investing the down payment and monthly savings if renting
CMHC Mortgage Insurance Required
With a 10% down payment, you must pay $13,950 in CMHC insurance, added to your mortgage balance.
Land Transfer Tax
In Ontario, you will owe approximately $6,475 in land transfer tax at closing.
Mortgage Stress Test
Canadian lenders require you to qualify at the higher of your contract rate + 2% or 5.25%. Your stress-test rate would be 7.50%.
Renting wins
Renting is cheaper for the entire 25-year period
With these inputs, investing the down payment and monthly savings produces better financial results than home ownership.
Home Value (Yr 25)
$1,046,889
Equity (Yr 25)
$1,046,889
Investment Portfolio (Yr 25)
$1,356,931
Break-even Year
N/A
Cumulative Net Cost Over Time
Total cost minus accumulated wealth (equity or portfolio). Lower is better.
Year-by-Year Comparison
| Year | Buy Monthly | Buy Total Cost | Equity | Rent Monthly | Rent Total Cost | Portfolio | Buy Net | Rent Net |
|---|---|---|---|---|---|---|---|---|
| 1 | $3,790 | $101,958 | $60,025 | $2,025 | $24,300 | $82,561 | $41,933 | -$58,261 |
| 5 | $3,843 | $285,435 | $165,852 | $2,276 | $128,919 | $200,625 | $119,584 | -$71,706 |
| 10 | $3,917 | $518,624 | $323,971 | $2,635 | $278,133 | $385,773 | $194,653 | -$107,640 |
| 15 | $4,004 | $756,714 | $517,301 | $3,050 | $450,874 | $625,981 | $239,412 | -$175,107 |
| 20 | $4,104 | $1,000,486 | $754,575 | $3,532 | $650,889 | $940,698 | $245,911 | -$289,809 |
| 25 | $4,221 | $1,250,845 | $1,046,889 | $4,091 | $882,522 | $1,356,931 | $203,956 | -$474,408 |
Net cost = total spending minus accumulated wealth (home equity or investment portfolio). Lower is better. Results are estimates for educational purposes only. Consult a financial professional for personalized advice.