Many of us were taught from a young age that buying a home is an essential step on the path to a successful life. But it’s harder to buy a home than it’s ever been. Housing prices have grown at a much higher rate than wages have, and this has made home ownership an unlikely goal for many young Canadians –– even those with jobs that pay well above the average salary. This brings many of us to a crossroads. Could it be better to rent rather than buy? For those of us who plan to buy a home, what makes it worth the investment? Both renting and buying have pros and cons.

Buying a home: an overview

The forced investment you have in home ownership is one of the biggest benefits. Paying a monthly mortgage means every payment you make goes towards your home equity, so you’re continually investing in your future. Home values tend to rise, so owning a home can be a great way to build equity with an investment that gives back. When you buy a home, you can also choose a fixed-rate mortgage so that you know exactly how much your monthly payments will be for a set period of time. With a rental agreement, a landlord can hike the rent, depending on local bylaws. Owning a home also gives you full control over your property. You can fully renovate, just paint, or make other modifications to turn your house into the home you want.

Renting a home: an overview

Renting a home or apartment gives you more flexibility than owning a home does. Want to move to a different province? Once your rental term ends, all you need to do is pack. Your monthly payments will often be lower than the combined cost of property taxes and mortgage payments involved in owning a home, but it depends on where you’re renting. Renting gives you the flexibility  to try out a new neighbourhood when you feel like exploring or upsize when you get a raise. Your landlord is responsible for house repairs too, so if your roof is leaking you’re not the one who has to pay for it. If you’re making a good salary and you’re renting, you might also have extra money to invest in a diverse stock portfolio or retirement planning.

Buy or rent? Consider these factors.

Buying and renting can both be smart financial decisions, depending on your goals, financial situation, personal values, and where you want to live. If you’re feeling torn about whether it’s time to buy, get specific and consider the details to narrow down the right choice for you.

What’s the big-picture plan?

What kind of time commitment are you truly ready to make? Owning a home is a big undertaking, and it’s generally advised to live in a home for at least five years if you want to make a profit. If you’re not sure which city you want to live in, value being mobile, or you’re at a job you might not want to keep, it might not be time to buy yet. If you’re in the middle of a big life change like a loss, a divorce, or a new empty nest, make sure your goal to buy a home is something you really want and not a reaction to a current life event.

Can you truly afford to buy a home?

Talk to your financial planner to set clear expectations for how much home you can afford, what kind of mortgage you can expect to pay, and whether you’re allocating enough money for surprise costs. Start with a pre-qualification to get a clearer picture of what’s possible. When you’re a homeowner, you’re responsible for repairs, maintenance, and property taxes. Even though the money you pay goes towards home equity, you also might end up paying more for your mortgage than you would to rent. In general, it’s recommended that you have enough income to allot 40% of it towards your home. Make sure that the financial weight of buying a home stacks up against your current financial health. If you’re not quite there yet, it might be smart to rent for a few more years and build a smart savings plan to buy when you’re ready.

What are housing trends forecasting in your area?

If you want to buy a home in Vancouver or Toronto, you’re facing a very different housing market than you would in rural Manitoba or Freelton, Ontario. While it’s great to monitor what the Canadian market is doing, the reality for your local Canadian housing market might vary. Look at trends for your township or province and ask your local real estate expert for advice. Some secondary markets are seeing home prices rise at a rate comparable to those of major cities; but you might also be able to buy in a township that’s a short commute from work where home prices are still reasonable. 

What are your financial goals and personal values?

While we all want financial freedom, everyone’s financial goals are different. One person may value flexibility and travel above stability and wealth. 


  • Make a list of your goals and values along with anyone you’ll be buying a home with; keep these within reach as you begin to consider whether buying is right for you. 
  • Do you have dreams of living abroad? Maybe buying is right for you, but you might want a smaller home that’s easy to lock up and maintain while you’re travelling.
  • Think you might want kids someday? Maybe you’ll choose a condo downtown with great potential for renting so you can keep it as a secondary source of revenue if you end up needing more space someday. 
  • You might also choose to invest in a property that costs less than your limit and still rent a cottage on a lake for summers in the country.

Is this the right time for you to buy a home?

Just because you don’t buy a home this year doesn’t mean you never will. The Canadian market is in its most competitive phase in history. The average Canadian home price rose 20% in the last year, and is at an all-time high. You can expect bidding wars and closing offers well over asking in most Canadian cities this year, so the process of buying may be more exhausting than it was five years ago. If your financial wellness doesn’t yet align with your homeownership goals, maybe you’ll find a cheap rental you love and save money while you explore neighbourhoods you might enjoy living in.

OJO can help with your home search

We’re living in a time with incredible resources and access to information we didn’t have before; so use search tools to benefit your home search. OJO’s school ranking and neighbourhood tools let you find homes that are in your area and get to know what’s within walking distance, even before you see a home.  Homebuying can be a daunting process, that’s why OJO is here providing support and guidance at every step of the way. For a new and differentiated homebuying experience, sign up at

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