- In this illustrative case, owning costs about $4,602 a month before any change in the home's price.
- Each 1% of yearly price growth offsets about $750 a month on a $900,000 home.
- Moving soon makes buying a poor choice: selling costs and property transfer tax are hard to recover.
"Is renting throwing money away?" Not exactly: part of every mortgage payment is principal you keep, but owning also has costs that never come back. The honest comparison is the full cost of owning, including the return you give up on your down payment, against rent.
An illustrative example
These numbers are assumptions for illustration, not a forecast. Take a $900,000 home with a 20% down payment ($180,000), a 25-year mortgage at 4.50% and these yearly costs:
| Item | Amount per year | Per month |
|---|---|---|
| Mortgage interest (year 1) | $31,775 | $2,648 |
| Property tax (assumed 0.35% of value) | $3,150 | $262 |
| Maintenance (assumed 1% of value) | $9,000 | $750 |
| Home insurance (assumed) | $1,500 | $125 |
| Return given up on down payment and property transfer tax (assumed 5% on $196,000) | $9,800 | $817 |
| Cost of owning, before price changes | $55,225 | $4,602 |
The mortgage payment itself is $3,985 a month, but about $16,045 of the first year's payments is principal, which builds your equity. The property transfer tax in this example is $16,000, paid once at registration (a first-time buyer would pay the full amount here, because the price is above the $860,000 limit). Condo owners should also add monthly strata fees, which can be several hundred dollars.
The break-even question
Compare the $4,602 monthly cost of owning (before price changes) with the rent for a similar home. If rent is lower, renting and investing the difference wins unless prices rise. Each 1% of yearly price growth on a $900,000 home is worth about $9,000 a year, or $750 a month. So if the home appreciates 2% a year, the effective cost of owning falls to about $3,102 a month; at 3%, to about $2,352.
Selling also costs money (agent commissions and legal fees), which makes owning a poor choice for short stays.
Factors beyond the numbers
- Stability: ownership protects against rent increases and forced moves.
- Flexibility: renting makes it easier to move for work.
- Risk: prices can fall; maintenance and special strata levies arrive unannounced.
- Discipline: a mortgage forces saving; renters have to invest the difference on their own.
What to check before you buy
Use the mortgage calculator for your own payment, the property transfer tax calculator for closing costs, and the affordability calculator to see what a lender will approve.
Calculate your mortgage payment →
Frequently asked questions
Is it cheaper to rent or buy in BC?
It depends on the local price-to-rent ratio, your time horizon and price growth. Compare your own numbers rather than relying on a general rule.
How long should I stay for buying to make sense?
Often five to seven years or more, because closing and selling costs are large.
What costs do first-time buyers forget?
Property transfer tax, legal or notary fees, home inspection, moving costs, strata fees, maintenance and property tax adjustments.
Do mortgage rates matter more than the price?
Both matter. A one-point rate difference changes the monthly payment far more than most buyers expect.