Purchasing a home will inevitably be one of the biggest financial decisions of your life. The question of whether it is the right time to buy depends on several factors. It is not solely about your finances.
Although your financial situation plays a major role, other important considerations include your age, the current real estate and mortgage market, and where you see yourself in the future.
So should you rent or purchase a home? Begin by asking yourself the following questions.
What are your future plans?
In the short term, renting is almost always cheaper. Renting involves fewer upfront costs and typically requires only first and last month’s rent, a monthly utility bill, and possibly the cost of moving.
Purchasing a home, on the other hand, brings a variety of expenses. Once you have saved the deposit, you will also need to set aside additional funds for the costs associated with the purchase.
Other expenses may include land transfer taxes, lawyer fees, and closing costs. After you move in, your monthly bills will likely be higher than they would be if you were renting.
It is wise to calculate how long you plan to stay in the area. Purchasing is generally the better choice if you intend to remain long-term. Renting may be significantly more cost-effective if you expect to move within a few years.
There are situations where this may differ. Purchasing in or near a large metropolitan city may lead to rapid appreciation, which could leave you in a stronger position when you sell. Predicting the market with certainty is impossible, so the best approach is to make the decision that aligns with your comfort level and risk tolerance.
How old are you?
If you are in your twenties, there is a higher chance you may relocate due to relationships or career opportunities. Renting offers more flexibility in this phase of life.
If you are in your thirties, in a long-term relationship, and more established in your career, purchasing may be a more suitable option.
Many people spend their twenties saving so they can purchase in their thirties. The earlier you know where you want to live and what your long-term plan looks like, the sooner you can consider buying.
How much does it really cost?
Homeownership involves numerous ongoing expenses. Although some have been mentioned already, it is best to calculate everything yourself to understand the full financial picture of renting versus buying.
Costs involved in purchasing include the deposit, which is typically around 20% of the home’s price, lawyer fees, land transfer fees, potential new-build closing costs, and moving expenses.
You may need to furnish the home, purchase window treatments, or complete renovations or repairs.
Carrying costs also increase. Renting usually requires one monthly payment to the landlord, along with hydro and tenant insurance. Homeownership requires paying your mortgage, property taxes, condominium fees if applicable, utilities, insurance, and ongoing maintenance. Setting aside money monthly for future repairs—such as a roof or furnace replacement—is also important.
The decision depends on your savings, local rental prices, and the size of your deposit. Running the numbers will help clarify what makes financial sense. It is essential to consider both short-term costs and long-term implications.
Are you in high interest debt?
If you have car loans, credit card debt, or other high-interest obligations, it may be more financially responsible to pay them off before saving for a down payment.
Taking out a mortgage while already carrying significant debt could place you in a more difficult financial situation.
Your chances of being approved for a mortgage, and securing a favorable interest rate, are also lower when you have multiple existing loans.
Paying off high-interest debt first strengthens your financial position before taking on a major mortgage commitment.
Do you have the deposit saved?
If your savings fall short of 10–20% of the purchase price, your monthly payments will be significantly higher. Contributing a larger down payment helps reduce your carrying costs.
Saving less than 20% also typically requires mortgage insurance, which increases monthly expenses.
Evaluate your current savings, calculate how long it will take to reach your goal, and begin searching for a home once you are financially prepared.
Another option is securing a private loan from someone you trust—such as a relative or close family friend—and repaying it monthly. This can help you enter the market sooner without relying solely on traditional financing.
Run the numbers to determine what makes the most sense for your situation.
Is your job stable?
Consider how long you have been in your job and whether you plan to stay in your current field. These questions are crucial when deciding whether to buy.
If you are happy in your career, plan to remain in the city, and feel confident about your job security, purchasing may be the better choice.
Individuals in contract-based roles, seasonal employment, or newly hired positions may benefit from waiting until their circumstances are more stable and predictable.
Conclusion
Purchasing a home might seem like the obvious choice for building equity and benefiting from future appreciation; however, it is not always the best option.
If you are early in your career, carrying significant debt, lacking a sufficient deposit, unsure about your long-term plans, or not yet established in your field, renting may provide greater flexibility and financial peace of mind.
When you feel more certain about your future and confident in your financial foundation, you will be better positioned to move forward with purchasing a home.