Between rising rents and declining mortgage rates on a national level, it seems like the question of renting versus buying is on every prospective homebuyer's mind. However, the age-old debate never seems to have a clear answer, especially when you factor in inflation and location. 

A new Zoocasa report seeks to answer this highly-contended question, by analyzing 26 markets across Canada and comparing monthly rental prices and monthly mortgage payments using average prices in December 2023. 

Additional costs, such as utilities or property taxes were not considered in the study, and rental price numbers were sourced from rentals.ca. Monthly mortgage payments were calculated assuming a 20 per cent down payment and a five-year fixed mortgage rate of 4.84 per cent amortized over 25 years. 

The study notes that 2024 kicked off with a hold of the overnight lending rate, and as a result, fixed rates have begun to come down. "High interest rates don't just impact homeowners, they also affect the rental market," the report adds. 

Average monthly rent prices versus average monthly mortgage payments across Canada. Source: Zoocasa.

In Toronto, the study found that the average monthly rent is $2,918, compared to an average monthly mortgage payment of $4,888, representing a $1,970 difference. 

When compared to other GTA cities, Toronto boasts a smaller difference between rent prices and average monthly mortgage payments. In Mississauga, the average monthly rent is $2,560, compared to an average mortgage payment of $4,808, representing a difference of $2,145. 

In Burlington, the average rent price is $2,367, while the average mortgage payment is $4,808, making it the GTA city with the largest gap between rent prices and mortgage payments analyzed in the study at $2,441.

In Brampton, the average rent is $2,264, while the average mortgage payment is $4,521, representing a difference of $2,257. 

However, there are still plenty of cities in Ontario where the difference between rent prices and monthly mortgage payments is less than they are in Toronto. In Hamilton, the average rent price is $2,005 compared to an average mortgage payment of $3,483, representing a difference of $1,478. 

In Kitchener, tenants can expect to dish out an average of $2,143 in rent, while homeowners see average mortgage payments of $3,208, representing a $1,065 difference. 

The study found that the most affordable Ontario market for buying a home is Kingston, where the average monthly mortgage payment of $2,494 is just $524 above the average rent price of $1,970. 

The city is followed closely by St. Catharines and Windsor, which boast a $792 and $815 difference between rent prices and monthly mortgage payments, respectively. 

Homes in this Ontario city cost half the Toronto average but barely anyone is buying them 🏠 https://t.co/rEwsoHbA4A #Ontario #RealEstate #Cost

— blogTO (@blogTO) December 3, 2023

Out of all the markets analyzed in the study, only one Canadian city had an average mortgage payment less than the average rent. In Winnipeg, the average rent is $1,526, while the monthly mortgage payment based on the average price amount is $1,521 — $5 less than the average rent. 

"On a national level, the disparity between rental costs and mortgage costs is not that significant. For condos, the average rent is $2,340, while the average monthly mortgage payment is $2,417," the study concludes. 

"That comes out as just a $77 difference, suggesting condo homeownership is still an affordable option for those looking to buy in areas with an average condo price comparable to the national average of $527,600."