In decades past, some people opted to invest the money they had saved for a down payment and benefit from the hassle-free and lower-cost option of renting. Today, however, rental rates in some Canadian cities have risen so much that they’re almost as much as a mortgage payment itself. So how do you decide when it’s better to buy and when it’s better to rent?
Renting might be your best option if:
- You aren’t ready to commit to a certain city. If you think you might end up moving in a few years and have to sell your home, you risk losing on your investment.
- You haven’t saved up a down payment. A sizeable down payment is key to a successful buying strategy, so if you’re still squirreling your savings away, it makes sense to keep renting.
- You don’t want the responsibility. One benefit of renting is that it’s your landlord who is on the hook for major maintenance and repairs. If you like the hassle-free option of renting, perhaps it’s best to put off the home search.
Buying might be your best option if:
- You live in a Canadian city where the monthly costs of purchasing a home are actually lower than renting.
- You like the idea of paying off your own mortgage, instead of helping someone else pay theirs and having no equity to your name after you give up your lease.
- You can afford to buy in an area you like and still have enough money to live comfortably.
There are no hard and fast rules on whether it’s better to buy or rent a home. Much of it depends on your lifestyle, finances, your goals for the future and the specific market you’re considering. Taking all of these into account can help you decide what’s best for you.