When it comes to the Canadian housing market, there are lots of options. From renting an apartment to owning a single-family home, it all comes down to where you’d like to live and what you can afford. There is no right or wrong answer when it comes to whether you should rent or buy, but we’ve broken down the pros and cons of both below.

Why Do People Rent?

One of the most common answers to this question is affordability. Most people rent because they believe it is cheaper than owning a home. This can be true in some cases, but there are also times when monthly rent costs more than monthly mortgage payments. Of course there are also cases where rent is far more affordable than buying. Affordability is fairly dependent on an individual’s situation, but it is not the only deciding factor for choosing to rent.

Another reason you may choose to rent is that you simply aren’t sure where you want to live. If you’re new to an area, you may want to rent until you get to know the neighbourhoods and determine which area is the right fit for you. In some cases, you may not be able to find a home that is affordable in the area you want to buy.

For people who travel a lot for work or like to be free-floating, renting can be the perfect option.

Pros and Cons of Renting

To help you decide if renting is right for you, we have put together a list of pros and cons:

Why Do People Buy?

According to the most recent data, Canada boasts an overall homeownership rate of 67.8%. Even for those Canadians aged 35 and under, more than 40% of households own their own homes. This is quite an impressive statistic! So, let’s look at why people choose to buy.

One of the main reasons that people choose to buy a home is stability and peace of mind. This means you are not at risk of the landlord asking you to leave (in accordance with residential tenancy terms).

For others, building equity is a very strong benefit. When you choose to rent, you are paying someone else’s mortgage, but when you work towards buying your own home, that money is invested into your own future. This is an extremely important aspect to consider if you are finding saving for retirement a challenge.

Pros and Cons of Buying

To further show the benefits of buying, we have broken down some pros and cons below:

So, Should You Rent or Buy?

The reality is that in the long run, homeowners often fare financially better than renters because homeownership enables forced savings that accumulate over the years through property equity. If you are unhappy renting or really prefer the idea of owning your own home, just know it’s possible! All you need is the right information and the right preparation.

Some other things to consider before buying include:

• Your credit score – Do you have good financial standing to be approved for a mortgage?
• Your savings – Do you have any money put away for a downpayment? If not, do you have wiggle room in your budget to start saving?
• Your time – Do you have the resources to maintain a home?

Regardless of whether you choose to rent or buy, the most important factor is your financial security. What works for your friend or your parents may not work for you – and that is okay! However, educating yourself and looking into all the options will ensure that, at the end of the day, you are in the best situation for yourself. This is where talking with a real estate agent and mortgage broker can help you to determine if purchasing a home is viable. If you’re not ready to reach out but want to know if homeownership is an option, you can use our My Mortgage Toolbox app. It will calculate the minimum down payment needed and what your monthly mortgage costs might look like.