Break-Even Analysis
Compare the true cost of renting vs. owning over time
Home Purchase
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Monthly Rent
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Break-Even Rent Comparison
Monthly rent needed to equal ownership costs
2-Year Break-Even
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Principal Paid
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Interest Paid
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Equity Built
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3-Year Break-Even
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Principal Paid
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Interest Paid
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Equity Built
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5-Year Break-Even
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Principal Paid
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Interest Paid
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Equity Built
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Cumulative Cost Comparison (10 Years)
Total Cost Analysis
See the true cost of ownership and what home value is needed to break even
1 year
30 years
Total Ownership Cost
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Down Payment
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Mortgage Payments
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Property Tax
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Maintenance & Insurance
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Property Transfer Tax (BC)
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Selling Costs (2.5%)
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Rental Income (Suite)
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Total Rental Cost
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Rent Payments
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Renter's Insurance
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Down Payment Saved
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Methodology & Disclaimers
How Ownership Costs Are Calculated ▼
- Down Payment: Your initial cash investment, included as an opportunity cost since this money is no longer available for other investments
- Mortgage Payments: Monthly principal and interest payments calculated using standard amortization over 30 years with a fixed interest rate
- Property Tax: Annual property tax that increases each year by the specified inflation rate (compounds annually)
- Maintenance & Insurance: Monthly maintenance and home insurance costs that increase each year by the specified inflation rate (compounds annually)
- Property Transfer Tax (BC): One-time tax paid when purchasing property in British Columbia:
- 1% on the first $200,000
- 2% on the portion from $200,000 to $2,000,000
- 3% on the portion from $2,000,000 to $3,000,000
- 5% on any amount above $3,000,000
- Selling Costs: Real estate commission and transaction fees when selling the property, estimated at 2.5% of the home's purchase price
- Rental Income (if applicable): Income from a basement suite or rental unit, which offsets your ownership costs. This income increases annually at the same rate as the rent increase rate
How Rental Costs Are Calculated ▼
- Monthly Rent: Your monthly rent payment, which increases annually by the specified rent increase rate (compounds annually)
- Renter's Insurance: Monthly renter's insurance cost, assumed to remain constant over time
- Down Payment (Opportunity Cost): The amount you would have used as a down payment is included in rental costs because if you rent instead of buy, you retain this cash. This represents the opportunity cost of not putting that money toward a home purchase
Key Assumptions ▼
- Fixed-Rate Mortgage: 30-year mortgage with a fixed interest rate that does not change over the loan term
- Inflation: Property taxes, maintenance costs, and insurance increase annually by your specified inflation rate using compound growth
- Rent Increases: Both your potential rent and any rental income from a suite increase annually by the specified rent increase rate using compound growth
- Sale at End of Term: The calculation assumes you will sell the property at the end of your selected time period
- Cost Comparison Only: This calculator compares cash outflows only and does not predict or include potential changes in home value (appreciation or depreciation)
- Nominal Dollars: All costs are shown in nominal dollars (not adjusted for time value of money or discounted to present value)
Important Disclaimers & Limitations ▼
- Not Financial Advice: This calculator is for educational and informational purposes only. It is not financial, legal, or tax advice. Consult with qualified professionals before making any real estate or financial decisions
- Home Value Changes Not Included: This calculator does not predict or include potential home appreciation or depreciation. It compares costs only, not potential investment returns
- Major Repairs & Renovations: Does not account for large one-time expenses such as roof replacement, HVAC system repairs, foundation work, or major renovations
- Utilities Not Included: Assumes utility costs (electricity, gas, water, internet) are similar whether renting or owning
- Strata/Condo Fees: Monthly strata or condo fees should be included in the "Monthly Maintenance & Insurance" field if applicable
- Investment Returns Not Calculated: Does not calculate potential investment returns if your down payment were invested elsewhere (stocks, bonds, savings accounts)
- Tax Benefits Not Included: Does not factor in mortgage interest deductions, property tax deductions, capital gains exemptions, or rental income tax obligations. Tax implications vary by jurisdiction
- Mortgage Insurance: If your down payment is less than 20%, you may be required to pay mortgage default insurance (CMHC insurance in Canada). This is not included in the calculation
- Prepayment Options: Assumes standard monthly mortgage payments with no extra principal payments or lump sum prepayments
- Market Conditions: Does not predict future interest rates, economic conditions, housing market trends, or rental market conditions
- Personal Factors: Does not consider lifestyle preferences, job stability, family planning, mobility needs, or other non-financial factors that affect the rent vs. buy decision
- Location-Specific Rates: Property transfer tax rates are specific to British Columbia. Other provinces and territories have different land transfer tax rates and rules. First-time buyer rebates and exemptions are not included
- Simplified Model: This is a simplified financial model. Real-world scenarios are more complex and may include additional costs and considerations not captured here
How to Use This Calculator:
Use the slider to compare costs over different time periods. This calculator helps you understand the true financial cost of owning versus renting, but remember that buying a home builds equity (ownership of an asset), while renting does not. The lower cost option isn't always the right choice—consider your personal circumstances, local market conditions, how long you plan to stay, and whether you value the flexibility of renting or the stability of ownership.
Use the slider to compare costs over different time periods. This calculator helps you understand the true financial cost of owning versus renting, but remember that buying a home builds equity (ownership of an asset), while renting does not. The lower cost option isn't always the right choice—consider your personal circumstances, local market conditions, how long you plan to stay, and whether you value the flexibility of renting or the stability of ownership.
RAY REYHANI
Cell: 604.537.6588
Email: info@Reyhani.ca
Office: 604.416.0067
Fax: 604.922.0732
202 – 1555 Marine Drive West Vancouver, BC V7V 1H9
Ray Reyhani is an independently owned and operated broker member of Royal Pacific Realty Lions Gate. This is not an offer for sale. Not intended to induce breach of an existing agency agreement. 2023 Featuring Vancouver’s Finest Real Estate, All Rights Reserved. Contents of this website, including the photography & videos, may not be used without written consent from Ray Reyhani. Maximum effort is put towards the details but cannot guarantee, buyer to verify all details.
