What this calculator answers
Renting is not throwing money away, and buying is not automatically an investment. A fair comparison asks where you would stand after the same number of years: as an owner with home equity, or as a renter who invested the down payment and any monthly savings instead.
This calculator follows both paths month by month, with the same starting cash. It counts mortgage interest, property tax, maintenance, insurance, closing costs and the cost of selling, which many simple comparisons leave out.
How the calculation works
- The buyer pays the down payment and closing costs. Under 20% down, a default insurance premium is added to the mortgage. Alberta Land Titles registration fees are calculated from the price and mortgage.
- Each month the owner pays the mortgage, property tax, maintenance, insurance and any condo fees. The renter pays rent and tenant insurance. Rent rises once a year.
- The renter starts by investing the cash the buyer spent upfront. Whoever has the lower monthly cost invests the difference, and both portfolios grow at the same return.
- At the end, the buyer's net worth is the home value minus selling costs and the mortgage balance, plus any investments. The renter's net worth is their investments.
- The sensitivity table re-runs the whole comparison at different price growth and investment returns.
Assumptions and limits
- All example defaults (price, rent, rate, tax, insurance) are illustrations for the Edmonton area, not current market data or a rate quote.
- Price growth, rent increases and investment returns are assumptions. They have the biggest effect on the answer, so try several.
- The renter is assumed to invest every dollar saved. If that money would be spent instead, buying usually looks better.
- Mortgage default insurance follows the published premium schedule (insurer rules). The 20% and minimum down payment rules are federal.
- Alberta has no land transfer tax. Land Titles fees follow the current provincial formula; other provinces are not modelled.
- Income tax, property tax changes, special assessments and renovations are not included.
Common questions
How long do I need to stay for buying to make sense?
It depends on prices, rent and returns, but buying and selling costs often take several years to recover. If you might move within a few years, renting often comes out ahead.
Is rent money wasted?
No. Rent buys a place to live, just as mortgage interest, property tax and maintenance do for an owner. The question is which set of unrecoverable costs is lower and what happens to the rest of your money.
Why does the result change so much with small changes?
Because the home is a large, leveraged asset. A 1% change in yearly price growth on a $450,000 home moves your equity by tens of thousands of dollars over ten years. Investment returns matter in the same way for the renter.
Does this tell me what I can afford?
No. Lenders decide that from your income, debts and the stress test. The affordability calculator estimates it.
Sources
- CMHC notice, December 2024 changes (rules checked 2026-10-31)
- Ratehub: PST on CMHC insurance by province (rules checked 2026-10-31)
- Cassels: Alberta Land Titles fee changes (rules checked 2026-10-31)
- Alberta Municipalities: land titles fee increases (rules checked 2026-10-31)
- Interest Act, section 6 (rules checked 2026-10-31)