Rent vs. buy in Canada: the costs people forget to compare

Compare unrecoverable costs

For owners, unrecoverable costs can include mortgage interest, property tax, maintenance, insurance differences and transaction costs. For renters, rent is the primary unrecoverable housing cost.

Include opportunity cost

A down payment and closing costs tie up capital that could otherwise be invested. On the other hand, leverage means homeowners receive gains or losses on the entire property value, not only the down payment.

Time horizon matters

Buying and selling a home creates transaction costs. The shorter the expected holding period, the harder it can be for ownership to overcome those costs.

Lifestyle is not a spreadsheet cell

Stability, flexibility, renovation freedom, moving risk and personal preferences matter. A financial model should inform the decision, not pretend these factors do not exist.