Choose To Be a Rich Renter in #Toronto

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🏙️ Debating renting vs. buying in #Toronto? 💡 Discover why renting may be the smarter choice in today’s market. Explore costs and benefits with ease!

Last update Dec 2024
  • Scenario 1: Cost of Homeownership
  • Scenario 2: Cost of Renting
  • Which One Is Higher (%)

This chart compares living costs in Toronto for renting vs. buying, factoring in missed investments, rent increases, taxes, and equity growth. The higher curve shows the costlier option.

# Years from Now
Try your numbers:

Enter the total price of the home you're looking for.

A =

Enter the percentage of the purchase price you plan to pay upfront. A minimum of 5% is allowed for mortgages up to $1.5 million (as of December 2024). Paying 20% or more avoids CMHC insurance.

B =

Enter an estimated annual interest rate on your mortgage on home

C =

Enter the monthly cost for condo fees, if applicable.

D =

Enter the estimated monthly cost of maintaining your home, including repairs, landscaping, and other upkeep expenses.

E =

Enter your current monthly rent payment. Annual increase % reflects rising rental costs over time.

F̃ =

Enter the expected annual percentage increase in the home’s value. Appreciation builds equity that offsets the total home-owning cost.

G =

For a more accurate estimation, please enter your marginal income tax rate.

H =
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  • Amount
    Any single amount ($).
  • Cash Flow
    Rent, insurance premium, salary, ...
  • Current Asset
    Real estate, commodity, bonds, ...
  • Installment Loan
    Mortgage, car loan, ...
  • Percentage
    Any percentage value (%).
  • Years / Months
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  • Age
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  • Retirement Age (requires Age)
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Time Value Assumptions

Heads Up!

If you're using Cost Basis (cb) for calculating capital gains:

Please be aware that very few countries currently use inflation-indexed cost basis. Double-check your local tax rules before publishing.

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How is Cash Value calculated?

Total cost of homeownership includes CMHC premiums (if applicable), 2024 land transfer taxes (with first-time buyer rebates), 2024 property tax rate, a 25-year mortgage, property maintenance, estimated buying costs, and selling costs. The final cost equals the missed investment value of all buying and ongoing costs minus appreciated home equity, providing a complete financial overview.

Decisions / Expectations

(Expressions are evaluated at Year 0 only.)

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Calculations

(Expressions are evaluated at every year.)

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  • Buy Asset
    Buy an asset growing at its own rate.
  • Take Installment Loan
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  • Invest
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  • Expect to Invest
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  • Expect Monthly Cash Flow
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  • Expect Yearly Cash Flow
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  • Define Variable (Numerical)
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Add Intermediate Calculation
  • Define Variable (Numerical)
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  • Define Variable (Cash Flow)
    Calculate a combined cash flow.