Finance

Renting or Buying in Greater Montreal

By Georges Matar · May 23, 2026 · 7 min read

The question comes up every week: am I making a mistake by continuing to rent? Almost always, the person has already run a mental calculation, and that calculation compares two numbers that cannot be compared.

Rent versus mortgage payment: a false equation

Your mortgage payment is not your cost of ownership. It contains two very different things: interest, which is a pure expense, and principal repayment, which is forced savings. In the early years of a loan amortized over 25 years, the interest portion dominates by a wide margin.

Running the other way, that same payment ignores everything an owner pays on top of it: municipal taxes, school tax, home insurance, condo fees, maintenance, and often services that were bundled into the rent.

Putting a rent and a mortgage payment of the same size next to each other therefore compares a number that is too complete to a number that is too incomplete. The two errors run in opposite directions, and they do not cancel out.

What actually belongs side by side

On the ownership side, one month really costs you:

The month’s interest, not the full payment.
Municipal taxes. In Montreal, rates vary by building category and by borough, and for 2026 the city council capped the increase in the tax burden under its control at 3.4 %, with boroughs adding their own on top. In Laval, the 2026 tax bill applies a base residential rate of $0.4973 per $100 of assessment, plus an ARTM contribution, a water contribution and a water service charge of $486 per dwelling.
School tax: a single rate of $0.07899 per $100 of adjusted standardized assessment for 2026-2027, after a basic exemption on the first $25,000.
Home insurance, which the law does not require but every mortgage lender does.
Condo fees and maintenance, including the repair that only comes up once every fifteen years.
Electricity. Since April 1, 2026, Hydro-Québec’s Rate D charges 46.154 cents per day in system access fees, 7.065 cents per kilowatt hour up to 40 kWh per day and 11.142 cents for the rest, after a 3 % increase for domestic rate customers.

On the renting side, one month costs you the rent, tenant insurance, and whatever you pay separately depending on what the lease includes.

Only then do you subtract, on the ownership side, the principal repaid during the month. That is not an expense: it is a transfer from your chequing account to your net worth. The rent versus buy calculator does this line by line with your own numbers.

Appreciation is not guaranteed income

This is the variable everyone inflates. In August 2026, in the Montreal CMA, APCIQ reported a median price of $650,000 for single-family homes, up 3 % year over year, and $437,250 for condominiums. That same month, sales fell 13 % while active listings rose 18 %.

A market that is refilling faster than it empties is not a market where you can book a capital gain in advance. If your decision to buy only holds together with an optimistic appreciation rate, it does not hold together. Use a conservative figure, or none at all, and see whether the purchase still makes sense.

The opportunity cost of the down payment

This is the box the pro-buying camp skips every time. Money locked into a down payment stops working elsewhere. The return you give up depends on what you would otherwise have done with that money, and nobody can guarantee it: enter your own assumption in the calculator instead of accepting a ready made one.

Below 20 % down, a second mechanism kicks in. Mortgage loan insurance becomes mandatory, and according to CMHC’s schedule the premium runs from 2.80 % of the loan with 15 to 20 % down, to 3.10 % with 10 to 15 % down, to 4.00 % below 10 %. The premium is added to the loan, but the provincial sales tax on that premium, 9 % today and 9.975 % starting in 2027, cannot be financed: you pay it in cash at the notary. The 20 % down payment myth works through the trade off.

The entry costs you never get back

These are what actually move the tipping point, and they are almost always underestimated.

Transfer duties first. The 2026 base regime sets 0.5 % on the first $62,900, 1 % on the portion from $62,900.01 to $315,000 and 1.5 % on anything above $315,000, with thresholds indexed every year. Municipalities may add their own brackets above $500,000, and Montreal has extra latitude, so the real bill depends on the address. The welcome tax calculator prices it for a specific property.

Then come notary fees, unregulated since 1991 with no fixed tariff, which published 2026 estimates put between $1,500 and $3,500 for a financed purchase; the pre-purchase inspection, $500 to $900 for a normal sized single-family home; and the move, for which Quebec’s Office de la protection du consommateur recommends insisting on a written contract.

None of these amounts ends up in your net worth, and a second set of costs waits for you at resale. That round trip toll is why a property held too briefly loses money even in a rising market. The closing costs calculator and the real cost of a first home give you the full list.

The holding horizon, with no magic number

You will see a precise threshold quoted: five years, seven years. It does not exist. The right threshold is the point where principal repaid, plus your property’s actual appreciation, exceeds the round trip of non recoverable costs. It depends on price, rate, municipality, and the ratio between comparable rent and price.

Only the direction is certain: the shorter your horizon, the more renting wins, and the longer you stay, the more those entry costs get amortized. That is also why a job that might move you out of the region in two years is a financial argument, not just a personal one.

Rent control changes everything for a sitting tenant

Here is the factor that comparison tools built elsewhere never model.

For leases starting between April 2, 2026 and April 1, 2027, the Tribunal administratif du logement uses a base percentage of 3.1 %. Since January 1, 2026, that percentage is calculated on the three year average of the consumer price index rather than on the previous year alone. Other items specific to the unit can be added, including 5 % of capital expenditures.

The consequence: a long settled tenant often pays well below market, and that gap is a real asset no spreadsheet shows. The day they sign somewhere else, they lose it all at once.

The law also protects new tenants. Section G of the lease must state the lowest rent paid in the previous twelve months, and if the rent being asked is higher, the tenant can ask the Tribunal to set it within ten days of signing, or within two months if the notice was never given.

The balance of power is shifting all the same: CMHC measured a 2.9 % vacancy rate in the Montreal area in 2025.

There is no universal answer

The calculation will never tell you whether you will still be in the same city in four years, or what it is worth to you to redo a kitchen without asking permission.

In the 2021 census, Statistics Canada measured a homeownership rate of 59.9 % in Quebec, down from 61.2 % in 2016. Renting is not throwing money away, and buying is not automatically a good investment.

Run the numbers with yours, not with an article’s. Check what your budget actually allows with the affordability calculator, and read the hidden costs of homeownership before you conclude anything.

Want to run this calculation with your real numbers, your current rent and a specific property? Write to me and we will do it together, no strings attached.