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Renting vs. Buying a Home: The 5% Rule

Please note that while this content is broadly applicable, it was originally intended for a Canadian audience.

Posted: 20th May 2019 by Finance Monthly
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You can't compare rent to a mortgage payment. This way of thinking about the rent versus buy decision is extremely flawed. Comparing a mortgage payment to rent is not an apples to apples comparison. In order to properly assess the rent versus buy decision, we need to compare the total *unrecoverable costs* of renting to the total unrecoverable costs of owning.

That may sound like a complicated task, but I have boiled it down to a simple calculation.

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