When Does It Make Sense to Buy vs. Rent?

Mark Panizzon
Jul 16
2 min read

Deciding whether to buy a home or continue renting is one of the biggest financial decisions you’ll make. While homeownership has long been seen as a symbol of financial stability, renting can be a smart move depending on your goals, lifestyle, and financial situation.

Let’s break down the key factors that can help you decide when it makes sense to buy—and when renting might be the better option.

✅ When It Makes Sense to Buy

1. You Plan to Stay Put for 3+ Years

Buying a home is a long-term commitment. If you plan to stay in one place for at least three to five years, it can make more sense to build equity rather than pay rent.

2. You Have a Stable Income

Lenders want to see that your income can support a mortgage and related housing costs. If your job is secure and your income is consistent, you may be ready to buy.

3. You’ve Saved for a Down Payment

In Canada, you can buy a home with as little as 5% down (for homes under $500,000). However, a larger down payment reduces your mortgage amount and helps you avoid or reduce mortgage default insurance.

4. You Want to Build Equity

Every mortgage payment builds equity in your home—money that you can tap into later through refinancing or selling. Renting doesn’t offer that benefit.

5. You Want More Control

Owning your own home gives you the freedom to renovate, personalize, and make long-term decisions without a landlord’s permission.

🛑 When It Makes Sense to Rent

1. You’re New to an Area

If you're moving to a new city or province (like relocating to Edmonton or Prince George), renting can give you time to get to know the neighborhoods and housing market.

2. You Don’t Have a Stable Income (Yet)

Self-employed? Contract work? New to Canada? Renting might be the safer choice until your income or credit history becomes more mortgage-friendly.

3. Your Credit Needs Work

Mortgage approval depends heavily on your credit score. If you’ve had challenges in the past (consumer proposal, missed payments), it may be wise to rent while you rebuild your credit.

4. You Want Flexibility

Renting allows for short-term commitments and easier moves—ideal if you’re uncertain about your job, relationship, or where you want to live long term.

5. You’re Not Ready for Maintenance

Homeownership comes with extra responsibilities—from repairs to property taxes to insurance. Renting puts those costs (and headaches) on the landlord.

🧠 The Bottom Line

There’s no one-size-fits-all answer to the rent vs. buy question. It comes down to your goals, your finances, and your lifestyle.

Want help weighing your options? As a mortgage professional, I can help you: