Economy and entrepreneurship

Rent vs. Buy in 2026: What to Know Before You Decide

April 30, 2026

Authored by Kari Norman, Senior Economist, and Nashaunn Ali, Mortgage Representative at Desjardins Group

Choosing whether to rent or buy in 2026 may depend on a range of variables, such as market conditions, your budget and your lifestyle. Home prices have come down from their peak, but mortgage rates are still currently high. At the same time, more rental apartment buildings are opening across the country, which may give some renters a bit more choice and ease some of the pressure on rent.

Renting and buying come with different advantages. Renting usually costs less upfront and gives people more flexibility should their life plans change. Buying can offer long‑term stability for those who have saved enough for a down payment and can manage the typically higher monthly costs. Understanding the financial trade‑offs and how each option fits your lifestyle will help you decide what makes the most sense based on your needs and your situation.

The Market Picture: What’s Changed in 2026 So Far

Canada’s housing market has continued to adjust in early 2026.[i] The average price of a home in Canada has fallen over the year to about $660,000, which is more than 15% below its 2022 peak. However, overall homebuying conditions vary by area, supporting sustained price growth in some markets. Higher borrowing costs have generally moderated demand among potential buyers. Fixed mortgage rates are well below their recent peaks but have started to rise again and now sit in the mid-4% range.

In general, renters are currently seeing some financial relief. Vacancy rates are rising as immigration slows and more rental apartment construction projects are completed. This increase in available units has helped asking rents fall slightly in many markets. The average asking rent nationwide for a two-bedroom unit in a large city is now around $2,125 per month, giving renters a somewhat more manageable monthly expense. However, rental conditions still vary across the country,[i] so where you live and your financial situation may play a major role in whether renting or buying is the better choice for you in 2026.

Why Renting Can Make Sense in 2026

Renting may become more appealing as new rental buildings enter the market. This growing supply may help cool rent prices in places that have experienced sharp increases in recent years. In many major cities, renters now have more choice and slightly more competitive pricing as the market adjusts.

Renting can be a good fit for households that are still building savings (i.e., for a down payment on a home), expecting changes in work or family life, or wanting to avoid the surprise costs that come with owning a home. It may also work well for people who value flexibility and are comfortable with rental arrangements/leases that may end or renew at a higher price.

When Buying Makes More Sense

Buying can still be the right choice for people who plan to stay in their home for several years. Rising incomes may be offset by declining buyer confidence. As a result, home sales are likely to soften this year. Prices may be flat nationally this year, potentially giving homeowners little in the way of equity growth.

Buying tends to work best for households with a stable income, enough savings for a down payment plus ongoing monthly and emergency costs, and a preference for predictable long‑term payments and building equity.

A Real‑Life Example: Renting vs. Buying in Toronto[i]

Alex is deciding whether to rent a two-bedroom apartment while saving to buy a home, or if he can afford to buy a small detached or semi-detached home in Toronto.

Renting

Rent: $2,800/month[i]
Tenant insurance: ~$25 to $60/month[ii] (depending on coverage type)
Utilities: ~$160/month[iii]
No down payment, taxes or major repairs
More rental supply improving availability

Total monthly payment: ~$2,985 to $3,020/month

Buying

Home price: $1,007,500
Estimated closing costs (including land transfer taxes, approximately 7% of the purchase price): ~$70,525
Down payment (20%): $201,500 (required on homes over $1 million to avoid Canada Mortgage and Housing Corporation (CMHC) mortgage default insurance[i])
Total upfront cost: ~$272,025 (down payment + closing costs)
Total mortgage amount: $806,000
Mortgage at 4.3% with a 25-year amortization: ~$4,380/month
Home insurance: ~$125–$200/month[ii] (depending on coverage type)
Property taxes + maintenance: ~$600–$900/month[iii]
Utilities: ~$250–$360/month[iv] (based on property size and energy efficiency)

Total monthly payment: $5,355 to $5,840. Part of Alex’s mortgage payment goes toward interest, while the remainder reduces the principal and builds equity through repayment. Alex may also build equity through potential property appreciation.

Buying may suit Alex if his income is sufficient and steady and his long‑term plans are stable. Renting is the safer choice if his financial means are more limited or his future plans are uncertain.

A Quick Checklist to Help You Decide

Before choosing a path of homeownership versus renting, consider a few practical questions to see which option aligns best with your finances and lifestyle:

Can I afford the monthly payments today?
Do I have both a down payment and an emergency fund?
Am I planning to stay in one place for several years?
Can I handle surprise costs?
Do I need flexibility right now?

In the end, the best choice is the one that fits your budget and long‑term plans. In 2026, renting is generally becoming more affordable, while buying usually requires a more substantial financial cushion. The right option is the one that keeps your finances steady and supports your goals.

[i] Desjardins Economic Studies, Canada: Housing Markets Tread Water as Sales Remained Soft in March – April 16, 2026, https://coop.desjardins.com/oc/en/savings-investment/economic-studies/canada-housing-market-16-april-2026.html

[ii] Rentals.ca, Rent Report, https://rentals.ca/national-rent-report

[iii] Disclosure: These figures are estimates based on publicly available data, third-party market sources and typical cost ranges for Toronto households. Actual costs may vary depending on the specific property, lender, insurer, utility provider and individual household usage. These estimates are provided for illustrative purposes only and should not be interpreted as financial advice or a precise reflection of future expenses.

[iv] In Ontario, rental units first occupied in 2018 or later are exempt from rent control. All older units remain covered. Source: Government of Ontario. Residential rent increases. Ontario.ca.https://www.ontario.ca/page/residential-rent-increases

[v] Rates.ca, Average Tenant Insurance Cost in Toronto 2026, https://rates.ca/insurance-quotes/tenant/toronto#average-tenant-insurance-in-toronto-2026

[vi] City of Toronto, Current City of Toronto Average Market Rents & Utility Allowances, https://www.toronto.ca/community-people/community-partners/social-housing-providers/affordable-housing-operators/current-city-of-toronto-average-market-rents-and-utility-allowances/

[vii] Canada Mortgage and Housing Corporation (CMHC), Mortgage Loan Insurance Costs, https://www.cmhc-schl.gc.ca/consumers/home-buying/mortgage-loan-insurance-for-consumers/cmhc-mortgage-loan-insurance-cost

[viii] Rates.ca, Average Home Insurance Cost in Toronto 2026, https://rates.ca/insurance-quotes/home/toronto#average-home-insurance-in-toronto-2026

[ix] City of Toronto, Property Tax Calculator, https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-calculator/property-tax-calculator/

[x] Ontario Energy Board (OEB), Residential Electricity Bill Calculator, https://www.oeb.ca/_html/calculator/en/electricity/res/