JOIN OUR TEAM - BROKER LOGIN - FRANÇAIS

Is Owning A Home Truly The Best Bet?

Jul 3, 2019|Source: Mortgage Architects

Whether you’ve just bought your first home or you’ve been a homeowner for years, there’s good news for you. You can feel confident you made the right decision for your long-term economic wellbeing according to the findings of a study by Mortgage Professionals Canada (MPC), the national association that represents the mortgage industry.

MPC decided to take a deep dive to compare owning versus renting and concluded homeownership is the best financial decision in the long run for most Canadians.

The cost of ownership is lower than the cost of renting for more than 75% of the 266 cases studied, which included locations and dwelling types. As of the second quarter of 2018, the monthly cost of owning was lower than the cost of renting.

The study noted however, costs of homeownership include considerable amounts of repayment of mortgage principal. This is a form of saving. When this saving is considered, the “net” or “effective” cost of homeownership is correspondingly reduced. On a net basis, the cost of ownership is lower than the cost of renting according to the study.

On average, the monthly cost of owning exceeds the cost of renting an equivalent dwelling by $541 per month. But, when the principal repayment is considered, the net cost of owning is actually $449 less than the cost of renting.

MPC’s study also found the largest element of the ownership cost (the mortgage payment) is fixed for some time, whereas the cost of renting will increase more rapidly than the cost of homeownership. The analysis projects the costs of owning and renting for 5 years and for 10 years, assuming that all of the cost components (apart from the mortgage payments) rise by 2.5% per year. The study concluded that homeownership becomes increasingly advantageous over time.

By the time a mortgage is fully repaid, the cost of owning a home will be vastly lower than the cost of renting. On average the cost of owning is projected at $1,549 per month versus $4,655 for renting equivalent dwellings over a 25-year mortgage amortization.





TODAY'S RATES

TERMPOSTEDMA RATES*
{{rate.Term}}{{rate.Posted}}{{rate.OurRate}}

Subject to change. Conditions may apply.
Updated: {{RatesData.Modified}}

PROUD SUPPORTERS OF

Total amount raised
$57,904.44
Updated: 10/21/19
Learn More

LEARNING CENTRE

Considering a fixed rate mortgage? Get informed!

Learn More
Renovating your home is within financial reach. Find out how!

Learn More
Is your mortgage coming up for renewal? You should talk to a broker!

Learn More

APPLY NOW

Want a mortgage? Get a mortgage! Apply now!

Apply Now

CALCULATORS

Want to find your monthly payment or what you can afford? Find out this and more with our easy to use calculators!

Learn More

OUR TWITTER