Rent Vs Own Calculator Canada Government

Breakeven Formula:

\[ Breakeven = \frac{(Purchase\ Price + Closing\ Costs - Rent\ Savings)}{Years} \]

Purchase Price (CAD):

CAD

Closing Costs (CAD):

CAD

Rent Savings (CAD/year):

CAD/year

Years:

years

Breakeven (CAD/year):

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is the Rent vs Own Breakeven Calculation?

The breakeven calculation compares the costs of renting versus owning a home in Canada. It determines how many years it takes for owning to become financially advantageous compared to renting, based on Canadian government tools and methodologies.

2. How Does the Calculator Work?

The calculator uses the breakeven formula:

\[ Breakeven = \frac{(Purchase\ Price + Closing\ Costs - Rent\ Savings)}{Years} \]

Where:

\( Purchase\ Price \) — Total home purchase price in CAD
\( Closing\ Costs \) — All associated closing costs in CAD
\( Rent\ Savings \) — Annual rent savings in CAD
\( Years \) — Time period for comparison in years

Explanation: The equation calculates the annual cost difference between owning and renting over a specified time period.

3. Importance of Breakeven Analysis

Details: Understanding the breakeven point helps Canadians make informed decisions about whether renting or owning makes more financial sense for their situation, especially when considering long-term housing strategies.

4. Using the Calculator

Tips: Enter all values in Canadian dollars. Be sure to include all relevant closing costs and accurate rent savings estimates. The years field should reflect your planned time horizon for comparison.

5. Frequently Asked Questions (FAQ)

Q1: What's included in closing costs?
A: Typical closing costs include land transfer taxes, legal fees, title insurance, home inspection, and other administrative fees.

Q2: How do I calculate rent savings?
A: Compare your current rent to the estimated costs of ownership (mortgage payments, property taxes, maintenance, etc.).

Q3: What is a good breakeven point?
A: Generally, if the breakeven is less than 5 years, buying may be favorable. However, this depends on individual circumstances.

Q4: Does this account for home appreciation?
A: This basic calculator doesn't include potential home value appreciation, which could affect the long-term calculation.

Q5: Is this calculator specific to Canada?
A: Yes, it follows methodologies recommended by Canadian government housing tools and considers Canadian housing market factors.