Is it better to rent or buy a house?
Last updated: October 12, 2026
Short answer
Neither is better for everyone: buying tends to pay off when you plan to stay for several years and the full monthly cost of owning is close to what the same home would rent for, while renting is usually the better choice if you may move soon or buying would use up your savings. Buying takes cash that renting does not: a down payment of at least 5% (with less than 20% down you will generally pay for mortgage loan insurance), closing costs the federal government suggests budgeting at 1.5% to 4% of the price, and a provincial land transfer tax or registration fee that ranges from a few hundred dollars to several thousand. Count mortgage interest, property tax, insurance, maintenance and condo fees as the real monthly cost of owning, and remember that a down payment kept invested could be earning a return.
What buying costs that renting does not
Renting a home usually takes a deposit and the first month's rent. Buying takes much more cash before you get the keys:
- Down payment. The federal minimum is 5% of a price up to $500,000. Between $500,000 and $1.5 million it is 5% of the first $500,000 plus 10% of the rest, and at $1.5 million or more it is 20%. On a $600,000 home that means at least $35,000.
- Mortgage loan insurance. With less than 20% down you will generally need it. It protects the lender, not you, and the premium runs from 0.6% to 4.5% of the mortgage. It can be added to the mortgage, but then you pay interest on it. Ontario and Manitoba charge provincial sales tax on the premium, and the lender cannot add that tax to the mortgage, so it is paid at closing.
- Closing costs. The Financial Consumer Agency of Canada suggests budgeting 1.5% to 4% of the purchase price for items such as legal fees, a home inspection, title insurance and property tax adjustments. CMHC also lists an appraisal, a survey, an estoppel certificate for a condo, water and septic tests for a rural home, and the provincial land registration fee.
- Land transfer tax or registration fees. These vary more than any other buying cost from one province to the next. See the table below.
Once you move in, owning costs more than the mortgage payment. Add up mortgage interest, property tax, home insurance, condo fees if there are any, and money set aside for maintenance and repairs. Only the part of each payment that goes to principal builds equity; the interest, tax, insurance, fees and upkeep are spent, much like rent. When you rent, the owner pays the property tax and the building's insurance and upkeep, and those costs are part of the rent.
Transfer tax and registration fees by province
The biggest difference between provinces is the tax or fee you pay when the purchase is registered, and whether first-time buyers get a break on it.
| Province | Tax or fee when you buy | First-time buyer relief |
|---|---|---|
| Alberta | Land Titles fees: $50 plus $5 per $5,000 of the land's value for the transfer, and $50 plus $5 per $5,000 of the mortgage | None in the fee schedule |
| British Columbia | Property transfer tax: 1% on the first $200,000, 2% up to $2 million, 3% above that, plus 2% more on residential value over $3 million | No tax on the first $500,000 for homes worth $835,000 or less; partial relief up to $860,000 |
| Manitoba | Land transfer tax: nothing on the first $30,000, then rising in steps to 2% on value above $200,000 | None in the Act |
| Saskatchewan | Land titles registration fees on the transfer and the mortgage (ask your lawyer for the current amounts) | Provincial First-time Homebuyers' Tax Credit, worth up to $1,575 |
| Ontario | Land transfer tax: 0.5% rising in steps to 2% on value from $400,000 to $2 million, and 2.5% above that for one or two single-family homes; Toronto buyers may also owe the City's tax | Refund of up to $4,000 |
| New Brunswick | Real property transfer tax: 1% of the price or the assessed value, whichever is higher | None in the Act |
| Nova Scotia | Deed transfer tax set by each municipality: 1% to 1.5% of the sale price on the province's July 2026 list | Ask the municipality |
| Prince Edward Island | Real property transfer tax: 1% of the price or the assessed value, whichever is higher | Tax waived for eligible first-time buyers |
| Newfoundland and Labrador | Registry of Deeds fees: $100 plus 40 cents per $100 of value above $500, on the deed and again on the mortgage (mortgage fee capped at $5,000) | None in the fee schedule |
Federal help applies in every province. First-time buyers can save up to $8,000 a year in a First Home Savings Account (to a $40,000 lifetime limit), withdraw up to $60,000 from their RRSPs under the Home Buyers' Plan and repay it over 15 years, and claim the home buyers' amount of up to $10,000 on their tax return. On a newly built or substantially renovated home, the first-time home buyers' GST/HST rebate is worth up to $50,000 for agreements signed on or after March 20, 2025. First-time buyers and buyers of newly built homes can also get a 30-year amortization on an insured mortgage.
How to compare renting with owning
- Find out what the home would rent for. Use SQRFT's rent estimator to see what the home you are looking at, or one like it, would rent for at that address.
- Work out the monthly cost of owning it. Add mortgage interest, property tax, insurance, condo fees and a maintenance allowance. Leave out the principal part of the mortgage payment, because that money stays with you as equity.
- Count what the down payment could earn. Cash tied up in a home is not invested anywhere else. If you keep renting, that money can stay in savings or investments, including a First Home Savings Account while you decide.
- Be honest about how long you will stay. Closing costs and transfer tax when you buy, and selling costs later, take time to earn back. If work or family might move you within a few years, renting keeps you flexible.
- Check what help you qualify for. The federal programs above and your province's first-time buyer relief can change the numbers a lot.
If owning costs about the same each month as renting the same home, and you expect to stay for years, buying can make sense. If owning costs much more, or you may move soon, renting and investing the difference may leave you better off.
Buying costs in each province
Alberta
In Alberta, you pay Land Titles fees to register the purchase. For documents received on or after October 1, 2026, registering the transfer of land costs $50 plus $5 for every $5,000 of the land's value, and registering your mortgage costs $50 plus $5 for every $5,000 of the principal. On a $400,000 home with a $380,000 mortgage, that is $450 for the transfer and $430 for the mortgage, on top of legal fees and other closing costs.
The fee schedule has no first-time buyer discount, so first-time buyers in Alberta rely on the federal programs. These fees are small next to the percentage-based transfer taxes in British Columbia, Manitoba and Ontario, so more of your cash can go to the down payment, but property tax, insurance and upkeep still apply once you own.
British Columbia
BC charges property transfer tax when the title is registered: 1% on the first $200,000 of fair market value, 2% on the part up to $2,000,000, 3% on the part above that, and a further 2% on the residential part above $3,000,000. On a $500,000 home that is $8,000.
First-time buyers pay no tax on the first $500,000 when the home is worth $835,000 or less, with partial relief up to $860,000, so a first-time buyer of that $500,000 home would pay none of the $8,000. You must be a Canadian citizen or permanent resident, have lived in BC for the 12 months before registration (or filed two BC tax returns in the last six years), never have owned a principal residence anywhere, and never have used the exemption before. The property must be 0.5 hectares or smaller, and you must move in within 92 days and live there until the first anniversary.
Manitoba
Manitoba charges land transfer tax on the fair market value of the property: nothing on the first $30,000, 0.5% from $30,000 to $90,000, 1% from $90,000 to $150,000, 1.5% from $150,000 to $200,000 and 2% on everything above $200,000. On a $400,000 home that comes to $5,650.
The Act sets no first-time buyer exemption, so first-time buyers rely on the federal programs. If your down payment is under 20%, Manitoba also charges provincial sales tax on the mortgage loan insurance premium, and that tax has to be paid at closing because it cannot be added to the mortgage.
Saskatchewan
Registering the transfer of title and your mortgage in Saskatchewan's land titles system costs a fee, as land registration does in every province. Your lawyer will include it in your closing costs; ask for the current amount when you budget.
Saskatchewan's First-time Homebuyers' Tax Credit is a non-refundable credit on $15,000 for homes bought from January 1, 2025, worth up to $1,575 off your provincial income tax. The rules follow the federal home buyers' amount: you (and your spouse or partner, if buying together) must not have lived in a home you owned in the year of purchase or the four years before, and you must move in within a year. Claim it on your Saskatchewan return for the year you buy.
Ontario
Ontario charges land transfer tax on the price. For a home with one or two single-family residences, the rates are 0.5% on the first $55,000, 1% up to $250,000, 1.5% up to $400,000, 2% up to $2,000,000 and 2.5% above that. On a $500,000 home that is $6,475. Buyers in Toronto may also owe the City's municipal land transfer tax on top.
First-time buyers can get a refund of up to $4,000, which covers the whole tax on a home up to about $368,000. You must be at least 18, a Canadian citizen or permanent resident, never have owned a home or an interest in a home anywhere in the world, and move in within 9 months; you have 18 months to apply. If your down payment is under 20%, provincial sales tax on the mortgage loan insurance premium is paid at closing because it cannot be added to the mortgage.
New Brunswick
New Brunswick charges real property transfer tax of 1% on the purchase price or the assessed value of the property, whichever is higher. On a $300,000 home assessed at less than the price, that is $3,000. Because the tax can be based on the assessed value, check the assessment before you make an offer.
The Act does not include a first-time buyer exemption, so first-time buyers rely on the federal programs. Add the transfer tax to your closing costs when you compare the monthly and upfront cost of owning with renting.
New Brunswick tenant rights | New Brunswick lease agreements
Nova Scotia
Nova Scotia's deed transfer tax is set by each municipality and charged on the sale price. It is paid when the deed is registered, and an Affidavit of Value has to be filed. On the province's July 2026 list, rates run from 1% to 1.5%, and both Halifax Regional Municipality and Cape Breton Regional Municipality charge 1.5%. On a $400,000 home in Halifax, that is $6,000.
Because the rate is set locally, confirm it, and ask about any exemptions, with the municipality where you are buying.
Prince Edward Island
PEI charges real property transfer tax of 1% on the purchase price or the assessed value, whichever is higher. The tax is waived for first-time buyers who are Canadian citizens or permanent residents, have lived in PEI for six months before registration (or filed tax returns in at least two of the last six years), have never held a registered interest in a principal residence anywhere, and have never used the exemption. Every buyer on the deed must qualify, you file a notarized Declaration, and you must live in the home for at least 183 consecutive days after registration or pay the tax. If you miss the residency test at closing, you can apply for a refund once you have lived in the home for 183 days.
PEI also runs a Rent-to-Own Pilot Program through Finance PEI for Islanders with modest incomes who do not own a home. It covers eligible homes worth up to $350,000 including any HST, and applicants need a written letter confirming that a recognized financial institution has declined them.
Newfoundland and Labrador
In Newfoundland and Labrador, the Registry of Deeds charges a fee to register your deed: $100 for the first $500 of value, plus 40 cents for each additional $100 or part of $100. Registering the mortgage is charged the same way on the amount it secures, and the mortgage fee is capped at $5,000. On a $300,000 home, the deed fee works out to $1,298.
The fee schedule has no first-time buyer discount, so first-time buyers rely on the federal programs. Your lawyer will confirm the exact registry fees when you budget closing costs.
Newfoundland and Labrador tenant rights | Newfoundland and Labrador lease agreements
Related questions
Is renting cheaper than buying?
It depends on the home, the price and how long you stay. Month to month, renting can cost less once you count everything an owner pays: mortgage interest, property tax, insurance, maintenance and any condo fees, not just the mortgage payment. Renting also avoids the down payment, closing costs and land transfer tax or registration fees. To check a specific home, compare its full monthly cost of owning with what SQRFT's rent estimator says it would rent for.
Is renting more expensive than buying?
It can be over a long stay, because rent builds no ownership while the principal part of each mortgage payment stays with you as equity. But owning has costs renters do not pay, from closing costs and transfer tax up front to property tax, insurance, repairs and mortgage interest every month, and selling later costs money too. If you move within a few years, those one-time costs can outweigh the equity you built. The fairest test is to compare a home's monthly cost of owning, leaving out the principal, with what the same home rents for.
Is it better to rent and invest or buy a house?
Renting and investing can come out ahead when renting costs less each month than owning and you actually invest the down payment and the monthly difference. Buying is more likely to come out ahead when the monthly cost of owning is close to the rent for the same home and you stay long enough to earn back the buying and selling costs. Neither investment returns nor home prices are guaranteed. While you decide, a First Home Savings Account lets a first-time buyer save up to $8,000 a year, to a $40,000 lifetime limit, with tax-deductible contributions and tax-free growth.
Should I rent for a year before buying?
It is often a sensible step if you are new to a city or province. A year of renting lets you learn the neighbourhoods, the commute and the real costs before you commit to a purchase that comes with closing costs and transfer tax or fees. It also gives you time to build a down payment, for example in a First Home Savings Account. Pick a lease length that fits your plan, because leaving a fixed-term lease early can cost you; see how to get out of a lease agreement.
Do you have to pay rent if you buy a house?
Not to a landlord once you own the home and live in it, but you take on an owner's costs instead: mortgage payments, property tax, home insurance, upkeep and, for a condo, monthly condo fees. Buying a home does not end your current tenancy, so you still owe rent until it ends with proper notice or by agreement with your landlord. Set your closing date with your notice period in mind so you are not paying rent and a mortgage for long at the same time. See how to get out of a lease agreement.
Is it better to rent or own in retirement?
It depends on your savings, health and plans. Owning a paid-off home means no rent or mortgage, but you still pay property tax, insurance and upkeep, and the money in the home is only available if you sell or borrow against it. Selling and renting frees that money and leaves most repairs to the landlord, but rent can rise: Alberta, Saskatchewan and Newfoundland and Labrador set no limit on increases, while the other six provinces limit yearly increases for most units. See how much a landlord can increase rent before you decide.
What is rent to own?
Rent to own is a private agreement where you rent a home now with the option, or sometimes the obligation, to buy it later at a price agreed up front or set by a formula. You usually pay an upfront option fee, and often a higher monthly rent, with part of the extra credited toward the purchase if you buy. There is no standard price: the fee, the credit and the purchase price are all set by the contract. If you do not buy, you usually lose the option fee and the extra rent.
Is renting to own a good idea?
It can help if you need time to build a down payment or qualify for a mortgage, but it usually costs more than ordinary renting, and the extra money is at risk if you cannot buy at the end. Before you sign, confirm the seller owns the home with a land title search, get an independent appraisal so the future price is fair, and have a lawyer check who pays property tax, insurance and repairs and what happens if your financing falls through. Treat a request for a large payment before you have seen the home or the paperwork as a warning sign; the guide on how to spot rental scams covers others.
Is rent to own still a thing?
Yes. Private rent-to-own agreements still exist, and Prince Edward Island runs a government Rent-to-Own Pilot Program through Finance PEI. It is for Island residents with modest incomes who do not own a home, covers eligible homes worth up to $350,000 including any HST, and asks applicants for a written letter confirming that a recognized financial institution has declined them. Check the program page with Finance PEI for current details before you apply.
My tenant wants to buy my rental house. What should I do?
Selling to a sitting tenant can save you showings and a vacancy. Start with an independent appraisal so the price is fair to both sides, ask the tenant for a mortgage pre-approval, and have a real estate lawyer prepare the purchase agreement and handle the closing. Before agreeing, compare the sale with keeping the property: SQRFT's rent estimator shows what the home should rent for now. Selling a rental property can mean tax on any capital gain, so speak to an accountant as well.
Should I rent or own a home calculator?
Any rent-or-buy comparison is only as good as the two numbers you put in for one specific home. Get the rent side from SQRFT's rent estimator, which estimates what a home at that address would rent for. Then add up the monthly cost of owning it: mortgage interest (your lender can tell you this for a given rate and term), property tax, insurance, condo fees and a maintenance allowance. If owning costs about the same as renting and you plan to stay for years, buying looks stronger; if it costs much more, renting and investing the difference may be better.
Is renting worth it?
It can be, especially if you may move within a few years or buying would use up your savings. Renting usually takes only a deposit (where your province allows one) and the first month's rent upfront, while buying takes a down payment of at least 5%, closing costs the federal government suggests budgeting at 1.5% to 4% of the price, and a provincial land transfer tax or registration fee. When you rent, the owner pays the property tax and the building's insurance and upkeep, and those costs are part of the rent.
What renting does not give you is equity, which only the principal part of a mortgage payment builds. To compare fairly, use SQRFT's rent estimator to see what a home like the one you are considering would rent for, then set that against the full monthly cost of owning it.
Is renting a waste of money?
Not necessarily. People call rent dead money, but rent pays for a place to live with the owner covering the property tax, building insurance and upkeep. Owners spend money too: only the part of each mortgage payment that goes to principal builds equity, while interest, property tax, insurance, condo fees and maintenance are spent, much like rent.
The long run is where the two can differ. If you expect to stay for years and owning costs about the same each month as renting the same home, buying can make sense. If owning costs much more, or you may move soon, renting may suit you better. SQRFT's general view, not financial advice: some people in that position invest the money they save, but returns are not guaranteed.
Government sources
- Financial Consumer Agency of Canada: Saving for a down payment
- Financial Consumer Agency of Canada: Buying a home
- Department of Finance Canada: Mortgage reforms come into force (December 15, 2024)
- Canada Revenue Agency: First Home Savings Account
- Canada Revenue Agency: Make the most of your First Home Savings Account
- Canada Revenue Agency: What is the Home Buyers' Plan
- Canada Revenue Agency: Line 31270, Home buyers' amount
- Canada Revenue Agency: First-time home buyers' GST/HST rebate
- CMHC: How much will my home really cost
- Government of Alberta: Land Titles and Surveys common documents fee schedule
- Government of BC: Property transfer tax
- Government of BC: First time home buyers' program
- Manitoba Laws: The Tax Administration and Miscellaneous Taxes Act
- Government of Saskatchewan: First-time Homebuyers' Tax Credit
- Government of Ontario: Land transfer tax
- Government of Ontario: Calculating land transfer tax
- Government of Ontario: Land transfer tax refunds for first-time homebuyers
- Government of New Brunswick: Real Property Transfer Tax Act
- Government of Nova Scotia: Municipal deed transfer and property tax
- Service Nova Scotia: Deed transfer tax rates
- Government of PEI: Real property transfer tax rate
- Government of PEI: Real property transfer tax first-time home buyers exemption
- Government of PEI: Apply for the Rent-to-Own Program
- Government of Newfoundland and Labrador: Registry of Deeds fees
General information, not legal advice. Rules change; check your province's tenancy office before acting.
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