Reviewed September 11, 2026. General planning information; confirm eligibility and costs for your transaction.
Compare a specific rental with a specific purchase
A lower mortgage payment alone does not settle the decision. Compare homes you would actually live in, including commute, space, lease terms and how long you may stay. The figures below are hypothetical planning inputs, not current Toronto averages or lender quotes.
| Illustrative input | Amount |
|---|---|
| Monthly rent | $2,300 |
| Purchase price | $590,000 |
| Down payment | $59,000 (10%) |
| Assumed fixed mortgage rate / amortization | 4% / 25 years |
| Annual property tax / monthly condo fees | $4,200 / $550 |
What owning costs in this example
A $531,000 base mortgage with a 3.10% insurance premium adds $16,461 to the loan, for $547,461 total. Using Canadian semi-annual compounding, the monthly mortgage payment is about $2,880. Adding $350 property tax and $550 condo fees gives about $3,780 monthly before heating, other utilities, home insurance, maintenance and special assessments. Rates can change at renewal; this is not a lifetime payment guarantee. CMHC premium schedule.
Cash needed up front
Both Ontario and Toronto transfer taxes are $8,275 on this example price, before rebates. Assuming full eligibility for $8,475 combined rebates, $1,316.88 Ontario tax on the insurance premium, a $2,900 planning allowance for professional and due-diligence costs, and $115.89 Toronto administration fee including HST, estimated cash is $71,407.77 including the down payment. Without those rebates, add $8,475. This excludes adjustments, moving, brokerage fees you owe, foreign-buyer taxes and new-build costs. Toronto tax and administration fee schedule.
Equity is only part of the comparison
Mortgage principal repayment builds equity, but interest, taxes, insurance, maintenance and transaction costs do not. A renter may invest the down payment and any monthly savings. Compare both paths using realistic investment returns, changes in property value and rent, selling costs, mortgage renewal rates and the value of flexibility.
There is no universal five-year break-even point
A shorter hold can make buying expensive, but owning for five years does not guarantee a profit or outperform renting. Closing costs divided by principal repayment is not a complete break-even calculation. Model several outcomes and keep enough cash for a price decline, repair or special assessment.
Run your own numbers
Use the affordability calculator with an actual tax bill, quoted mortgage rate and the condo’s current fees. For a rental, check what is included and the rules for ending the tenancy; the end of a fixed term is not an automatic walk-away date.
What the financing rules do to the monthly comparison
Two federal rules move the buy side of this comparison more than most people expect, and both have changed recently enough that older advice is unreliable.
Minimum down payment is set by price band.
| Purchase price | Minimum down payment |
|---|---|
| Up to $500,000 | 5% |
| $500,000 – $1.5 million | 5% of the first $500,000, plus 10% of the portion above it |
| $1.5 million or more | 20% of the entire price |
Mortgage loan insurance is generally required below 20% down and is not available at $1.5 million and above, which is why the jump at that threshold is a cliff rather than a slope. Financial Consumer Agency of Canada: down payment
Amortisation. Since December 15, 2024, a 30-year amortisation is available on an insured mortgage where the buyer is a first-time buyer or the property is newly built, on a home valued under $1.5 million. Canada Gazette, SOR/2025-55 Stretching an amortisation from 25 to 30 years lowers the monthly payment and increases total interest paid over the life of the loan. If you are comparing a monthly rent against a monthly mortgage payment, make sure you know which amortisation the mortgage figure assumes, because the two are not comparing the same commitment.
The rent side is not fixed either
A rent-versus-buy comparison quietly assumes something about how rent behaves over the holding period. In Ontario that assumption depends on one date.
It was 2.5% in 2025, and 1.9% has been set for 2027. Rent may be increased only once in any 12-month period, and the landlord must give written notice in the proper form at least 90 days before it takes effect.
But the guideline does not apply to new buildings, additions and most new basement apartments “occupied for the first time for residential purposes after November 15, 2018.” Ontario: residential rent increases A large share of newer Toronto condo rental stock falls on the uncapped side of that date. If the unit you are comparing against is exempt, your rent path is set by the market rather than by the guideline, and a comparison built on guideline-capped increases will flatter renting.
Ask one question before you model anything
When was the unit first occupied for residential purposes? The answer decides whether the rent side of your comparison is governed by a published annual cap or by whatever the market does next. It is a reasonable question to ask a landlord or listing agent, and the answer changes the arithmetic materially.
Is the example a current Toronto market average?
No. The prices, rent and interest rate are hypothetical inputs to demonstrate a comparison, not current market statistics or a mortgage quote.
Does buying always win after five years?
No. Your result depends on purchase and sale prices, financing, ownership costs, transaction costs and what your savings could earn while renting.