Rent or Buy? Running the Numbers in Metro Vancouver

Comparing your rent with a mortgage payment leaves out most of what it costs to own a home, and most of what renting lets you keep. Here is a way to run the numbers for Metro Vancouver, with a worked example and the BC rules that protect renters.

The short version

What owning costs each month

• Mortgage payment. Each payment covers the interest first, and the rest pays down the balance. The interest is a cost; the principal stays yours as equity. Early on, most of each payment is interest.
• Property tax. Billed each year by your municipality. If the home is your principal residence, the Home Owner Grant can reduce it.
• Strata fees. A monthly fee for a condo or townhouse, plus any special levies, which need a 3/4 vote of the owners.
• Insurance. A home insurance or condo owner's policy.
• Maintenance. Repairs and replacements inside your home, or for the whole building if you own a house.

Leave out costs you would pay either way, such as utilities, unless your rent includes them. With less than 20% down, you also pay a mortgage insurance premium, which can be added to the loan.

What renting costs

Rent is the main cost, plus tenant insurance for your belongings and your liability. A landlord can ask for a security deposit and a pet damage deposit of up to half of the first month's rent each. They come back to you after the tenancy ends, unless you agree in writing to a deduction or the Residential Tenancy Branch orders one, so they aren't costs.

What your down payment could earn

Money you put into a home stops earning anything else. If you rent instead, you can invest your down payment and closing costs, and add whatever you save each month when renting is cheaper. That lost return is a real cost of owning, even though no one sends you a bill for it. Investment returns are uncertain, just like home prices, so test more than one rate. I cover the savings programs and tax breaks for first-time buyers in First-Time Home Buyer Programs in BC.

Buying and selling costs, and your time horizon

• When you buy. Property transfer tax is 1% on the first $200,000 and 2% on the portion up to $2 million, unless an exemption applies. Then come legal fees, an inspection and adjustments, for which the Financial Consumer Agency of Canada suggests budgeting 1.5% to 4% of the price. I list them in Closing Costs in BC.
• When you sell. Commission, which the Financial Consumer Agency of Canada says may be negotiable and typically ranges from 2% to 6% of the price, plus legal fees, any mortgage penalty and moving costs. See What It Costs to Sell a Home in BC.

None of this comes back to you, so the fewer years you own, the more each year has to carry. If you might move within a few years, these costs alone can tip the answer toward renting.

A worked example

These are example figures only, not current prices, rents or rates. Say you are an eligible first-time buyer comparing a condo priced at $750,000 with renting a similar one.

• Buying. 20% down is $150,000. With the first-time buyer exemption, property transfer tax is $5,000, plus an example $2,500 for legal fees and an inspection. A $600,000 mortgage at an example fixed rate of 4.5%, compounded semi-annually, over 25 years is $3,320.84 a month. With example costs of $200 a month for property tax, $450 for strata fees, $40 for insurance and $100 for maintenance, the owner pays $4,110.84 a month.
• Renting. An example rent of $2,900 plus $25 for tenant insurance is $2,925 a month, about $1,186 less.
• The first year. About $13,400 of the mortgage payments goes to principal. Leaving aside the one-time costs of buying and selling, the owner's costs that don't come back are about $26,500 of interest, $9,480 of other costs and about $7,900 of return given up on the $157,500 paid up front, at an example 5% a year. That is about $43,800, against $35,100 for the renter.
• Five years on. Suppose the renter really does invest the $157,500 and the monthly difference at 5% a year, rent rises 2.3% a year (BC's limit for 2026), the owner's other costs rise 3% a year, the rate stays at 4.5%, and selling costs an example 3.5% of the price. If prices don't change, the renter is about $79,000 ahead. If prices rise 2% a year, the renter is still about $3,400 ahead. At 3% a year, the owner is about $36,500 ahead.
• The break-even. Prices need to rise about 2.1% a year for buying to win over five years, about 1.6% over ten years and about 2.7% over three.

Small changes move the answer. At an example rate of 5.5%, the five-year bar rises to about 2.9%, and if the renter's investments earn 3% instead of 5%, it falls to about 1.5%. If legal and other closing costs came to 1.5% of the price, the low end of the Financial Consumer Agency of Canada's range, instead of $2,500, the five-year bar would rise to about 2.4%. The example also leaves out tax: the gain on a principal residence is generally tax-free, while investment returns can be taxed unless they are in a TFSA, within your contribution room. Run your own numbers with my mortgage calculator.

Equity, risk and flexibility

• Leverage works both ways. In my example, with $150,000 down on a $750,000 home, a 10% rise in price adds $75,000 to your equity, and a 10% fall takes the same amount away, before buying and selling costs.
• Your rate resets at renewal. Each time you renew your term, you renegotiate the rate, so your payment can rise or fall.
• Forced savings. Principal payments build equity whether or not you would have saved the money otherwise.
• Surprises land on owners. A special levy, a failed water heater or a leaking window comes out of your pocket, so keep savings set aside.
• Control. As an owner, you decide when to move and what to change, within any strata bylaws. As a tenant on a month-to-month tenancy, you can leave with one full month's written notice, but your landlord can also end the tenancy for reasons the law allows.

Renting in BC: rent increases and security

• Rent increases are capped. For increases that take effect in 2026, a landlord can raise a sitting tenant's rent by up to 2.3%, no more than once every 12 months, with three full months' notice on the approved form. A larger increase needs your written agreement or the Residential Tenancy Branch's approval. The 2026 limit is tied to BC's inflation rate.
• The cap protects your current home. When you move, you and the new landlord negotiate the starting rent.
• Ending a tenancy. A landlord has to end a tenancy lawfully, usually with a valid eviction notice for a reason the Residential Tenancy Act allows. If the landlord or a close family member plans to move in, the landlord must give three months' notice, created through the Residential Tenancy Branch's web portal, and you receive one month's rent as compensation. In a building with five or more rental units that isn't strata-titled, or where one owner owns all the rental units, the landlord generally can't end a tenancy for this reason.
• Fixed-term leases. In most cases, a fixed-term tenancy becomes month to month when the term ends. A clause requiring you to move out at the end is allowed only for a sublet or when the landlord or a close family member plans to move in.

Questions buyers often ask me

Is it cheaper to rent or buy in Metro Vancouver?

It depends on the price, the rent, your rate and how long you stay. Compare the costs neither side gets back. In my example, buying came out ahead over five years only when prices rose more than about 2.1% a year.

Is paying rent throwing money away?

No more than paying mortgage interest, property tax and strata fees is. Only the principal part of a mortgage payment builds equity, and a renter can invest the down payment instead.

How long should I plan to stay if I buy?

Long enough to earn back the costs of buying and selling. In my example, the price growth needed to break even fell from about 2.7% a year over three years to about 1.6% over ten.

How much can my landlord raise my rent in 2026?

For an increase that takes effect in 2026, up to 2.3%, once every 12 months, with three full months' notice on the approved form. A larger increase needs your written agreement or the Residential Tenancy Branch's approval.

Can my landlord make me move out?

Only lawfully, usually with a valid notice for a reason the Residential Tenancy Act allows. If the landlord or a close family member will move in, you get three months' notice and one month's rent as compensation. That reason generally isn't allowed in a building of five or more rental units with one owner.

Thinking about your first purchase? Read How Much House Can You Afford? and First-Time Home Buyer Programs in BC, or try my mortgage calculator.

This article is general information, not financial advice. The worked example uses example figures, not current prices, rents or rates, and assumes a fixed rate of 4.5%, compounded semi-annually, for the whole period. Rules were current at the time of writing. For the Province's guide, see rent increases.