Homebuying Step by Step: Your Guide to Buying a Home in Canada
Renting versus buying: Pros and cons Start by finding out the average home price in the area where you want to live. Next, make a list of the pros and cons of owning versus renting to see which option is best for you. Use the following as examples.
Use the Renting versus buying worksheet in Step 1 of the workbook.
Renting
Pros
Cons
Less maintenance and repairs Lower monthly and upfront costs Shorter-term commitment, making it easier to move to a new home, neighbourhood or city Protection from decrease in property values Possibility to free up cash to invest or to save a larger down payment for a home
Monthly payments may increase year after year The risk that your lease won’t be renewed You are paying someone else’s mortgage rather than building equity of your own You can’t paint or remodel without the landlord’s permission
Buying
Pros
Cons
Freedom to renovate or modify your home as you wish You are building up equity in a safe, secure investment as you pay down your mortgage Potential for rental income if you include a secondary suite Stability and peace of mind that comes from being in control of your investment and owning the place where you live
The risk of financial loss if your home has lost value when you sell Responsibility for all ongoing costs including mortgage principal and interest, property taxes, insurance and maintenance Monthly payments can increase significantly if interest rates go up at renewal time Possibility of unexpected and potentially costly repairs
There are advantages to both renting and owning a home. Make sure you understand the benefits and responsibilities of each before you decide what’s right for you.
Newcomers to Canada can also visit cmhc.ca/newcomers .
Learn more about renting a home at cmhc.ca/renting .
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