Christopher Liew: The benefits and drawbacks of renting versus owning

A duplex shows a "For Rent" sign in the Montreal borough of Lasalle on Thursday, June 26, 2025. THE CANADIAN PRESS/Christinne Muschi

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Homeownership has traditionally been viewed as a symbol of financial success and stability. In today’s market, though, it’s a go

al that’s becoming increasingly out of reach. Between soaring housing prices, higher interest rates, and tighter lending standards, many renters are starting to wonder if buying a home is even worth it.

A growing number are choosing to rent for the foreseeable future, trading home equity for flexibility and lower stress. However, renting forever can also come with trade-offs that could affect your long-term wealth and stability.

To help you make the right choice, I’ll break down some of the key benefits and drawbacks of remaining a renter in today’s economy.

Benefits of continuing to rent

Buying a home isn’t the only path to financial stability. For many Canadians, renting offers flexibility, simplicity, and even the potential to save and invest more effectively, especially in more expensive housing markets like Toronto or Vancouver.

While housing costs in some markets like the GTA, for example, have started to drop incrementally, the long-term future of housing affordability is still up for debate.

1. More mobility and flexibility

Renting allows you to move when opportunities arise. Perhaps you’re offered a new job in another city, want to pursue a business opportunity in another city, or move closer to family.

As a homeowner, moving is a major hassle. Aside from the move itself, you could easily spend months listing, selling, and closing on your current home before you’re in a position to move to your desired city.

While you may have a contract with your current rental, you can often break the contract and move before your lease is up with minimal fees.

2. Lower upfront and ongoing costs

According to the Canada Mortgage and Housing Corporation’s (CMHC) 2024 Mortgage Consumer Survey, the average homebuyer in Canada spends 4.2 years saving for a down payment. With the national average home price at $676,154, even the minimum down payment on a CMHC-insured mortgage is significant. You’d need 5 per cent on the first $500,000 and 10 percent on the remaining $176,154, which works out to roughly $42,600. As a renter, you’ll only need to pay your first month’s rent and a refundable security deposit to move in.

Additionally, renters don’t have to pay homeowner’s insurance or mortgage insurance. While many landlords require tenants to keep renters’ insurance, this is normally a fraction of the cost of what you’d pay to insure your entire home.

3. No maintenance or repair responsibilities

One of the biggest benefits of renting is that you’re not responsible for maintenance or repairs to your home. If something breaks, it’s the landlord’s responsibility to take care of it on their dime.

As a homeowner, you could easily end up paying hundreds of dollars each month just to keep your home landscaped in the spring/summer and keep your driveway clear of snow in the winter. On top of this, homeowners will need to pay to periodically repair or replace appliances, the roof, plumbing, HVAC, and electric systems.

What if you owned a condo? You might not have a lawn or driveway to worry about, but you’ll still pay monthly condo fees. These fees cover things such as building maintenance, amenities, snow removal, and landscaping. And if the building needs major repairs, like replacing the roof or upgrading elevators, condo owners can also be charged special assessments that may run into the thousands.

Drawbacks of continuing to rent

While renting certainly comes with its share of benefits, there are a few drawbacks worth considering.

1. You don’t build home equity

Perhaps the most notable drawback is that renters never have the chance to build equity in a home. Equity is the portion of a home you actually own. When you pay a mortgage, part of each payment goes toward owning more of the property, and if the home rises in value, your equity grows too. Homes have traditionally been seen as a way to build wealth. Over time, your home should increase in value. By contrast, as a renter, every dollar spent on rent is a dollar that isn’t invested or building equity.

By the time your mortgage is paid off and you own the home outright, you’ll have a considerable investment under your belt that can be used to secure low-interest loans (using your property as collateral) or even sold to fund your retirement.

2. Rising rent and lack of control

Although rental prices around the country have dropped slightly in recent months, they still remain high in major cities. There’s also the fact that if you want to continue living in your current rental, your landlord may incrementally increase your rent each time you renew.

While some landlords may keep you at a fair rate or negotiate with you, many won’t. This could put you in a situation where you have to frequently move every year or two to keep your cost of rent affordable.

In a worst-case scenario, landlords might also use bad-faith evictions, such as falsely claiming they need the unit for a family member or pretending they plan major renovations, to remove current tenants. This allows them to bring in new tenants at a higher price and get around rent increase limits set by provincial rent control rules.

For example, in Ontario, most landlords can only increase rent by a set amount each year. The 2026 guideline maximum in Ontario is 2.1 per cent. By evicting a tenant and re-listing the unit, a landlord can often charge whatever the market will bear.

This can be particularly troublesome if you have a family. Moving could mean putting your kids into a different school district, changing routines, or leaving your family without a true sense of community.

3. Limited freedom to customize your space

For those who’ve dreamed of building a backyard garden, having a custom shower/bath, constructing a luxurious kitchen space, or simply painting the wall a different colour, renting will stand in your way. Landlords generally tend to frown on customizing your rental or may prohibit it outright.

As a homeowner, your options are just limited to how much money you’re willing to spend. Many upgrades and renovations will even increase your home’s value, giving you a future return on your investment.

Final thoughts

Ultimately, the best decision comes down to your own unique situation, desires, family, and career goals. For young professionals and those who value career flexibility and mobility, renting is often the easiest solution.

However, if you want to start a family, build roots in a community, and have the ability to build long-term wealth and equity in a home, then purchasing a home could be the better choice.

Just make sure that before you buy a home, you’re fully aware of all of the additional expenses that you’ll incur, so you don’t find yourself in over your head trying to keep up with the mortgage, insurance, and maintenance.