For generations, Canadians have been asking themselves this important question: ‘Is it better to buy a home or rent?’ On the one hand, owning comes with more responsibility and higher monthly expenses, but offers more stability and a long-term investment. On the other hand, the money spent on renting will never be recuperated, however, it can offer some flexibility if you’re not sure how long you will live in one place.
According to a recent Royal LePage-sponsored study by economist Will Dunning, it is more financially beneficial to purchase a home than to rent in Canada, more than nine times out of ten. The study uses price data for 278 scenarios (broken out by city and housing type) across the country and assumes the owner is able to provide a 20% down payment. In 91% of scenarios, the monthly cost of owning a home is less than renting an equivalent dwelling, when considering the net ownership costs (total cost of ownership minus the portion of mortgage payment that goes toward principal). This is called the ‘ownership advantage’.
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