Why I would prefer to rent (yes, really)

I'm going to say something you don't often hear from a financial planner whose network includes realtors and mortgage brokers: if you might move within the next five to seven years, you should probably rent.

Not forever. Not as a life philosophy. Just for now. And not because owning is bad — owning a home is one of the most powerful wealth-building things a Canadian family can do. But because the math of short ownership is much worse than most people realize, and the culture around buying makes it hard to say this out loud.

Why I'm writing this

I meet families every month who feel like they're falling behind because they haven't bought a home yet. The pressure comes from everywhere — family, cousins in group chats, coworkers, real estate ads, that one uncle who bought in 2003 and hasn't stopped talking about it. The pressure is real, but the math it's based on is often wrong for your situation.

My job is to help you build a durable financial life. Sometimes that means "yes, buy the house." Sometimes it means "not yet, and here's why that's the right answer."

The transaction costs nobody talks about

Every time you buy and sell a home in Canada, real dollars leave your pocket:

• Realtor commission on sale: typically 3–7% of the sale price, split between listing and buyer's agents.
• Legal fees: $1,500–$2,500 each time.
• Mortgage penalty if you break early: can be anywhere from a few hundred to $10,000+ on a fixed-rate mortgage.
• Moving costs, staging, minor repairs before sale: another $2,000–$5,000 easily.

On a $500,000 home, selling costs alone can run $20,000–$35,000. That's a huge number to earn back through appreciation and equity in a short timeframe — especially when the second thing works against you too.

The early-years equity mirage

A 25-year mortgage feels like it builds equity from day one. In practice, the payment schedule is heavily front-loaded with interest. In the first few years of a typical Canadian mortgage, the majority of every monthly payment is interest to the bank — only a slice reduces the loan balance.

This is not a scandal, it's just how amortization works. But it means the "I'm paying myself instead of a landlord" story is only half true early on. Yes, some money goes to principal. A lot goes to interest, property tax, insurance, condo fees or maintenance, and the roof that eventually needs replacing.

Short ownership is expensive. Long ownership is powerful. The whole game is knowing which one you're actually signing up for.

The 7-year lens

Before you commit to buying, ask yourself honestly:

• Is my job stable in this city for the next 5–7 years? Any chance of a transfer, a layoff, or a career pivot?
• Is my immigration status settled? (For newcomers on work permits, this one matters a lot.)
• Are we planning to have another child, or send one to a school in a different area?
• Could a parent's health mean moving in with family or moving them in with us?
• Would we want to move up in five years and would this home actually support that?

If more than one of those is a real "maybe," a home you'll likely sell in 3–5 years is a financially risky purchase, regardless of the market. If most of them are clear "no, we're staying," then buying starts to look great.

An honest math sketch

Two families, same income, same $80,000 saved. One buys a $500,000 townhome and sells in four years. One rents a comparable place for $2,300/month and invests the difference in a diversified portfolio inside FHSAs and TFSAs.

The buyers:

• Down payment + closing: about $30,000 out of pocket.
• Four years of payments: mostly interest, plus property tax, insurance, maintenance, and possibly condo fees.
• Home appreciates modestly, say 3%/year. Sale price is around $562,000.
• Selling costs (~5% + legal + a small penalty) eat $30,000–$35,000.
• Net proceeds after paying off the mortgage: maybe $70,000–$95,000, depending on rate and market.

The renters:

• Keep the $80,000 invested. Add the monthly difference between owning and renting (property tax, insurance, maintenance not paid) into the same portfolio.
• At a reasonable long-term return, that portfolio can grow to $120,000–$150,000+ over the same four years.
• They're fully liquid, fully mobile, and their tax-sheltered room is still working for them.

In a strong housing market with cheap money, the buyers can win. In a flat or slow market — which nobody can predict — the renters often win. Over a shorthorizon, the outcomes are closer than most people assume, and the buyer takes on much more risk.

When buying clearly wins

The math flips hard in favour of buying when:

• You'll stay in the home 7+ years, ideally 10+.
• Your work situation is stable in this city.
• Your family plans are settled — you know where the kids will go to school.
• The home suits you for the next chapter, not just today.
• You have the down payment and the cash buffer to weather a bad year.

In that scenario, the transaction costs get amortized over many years, principal payments become significant, and the tax-free growth on your primary residence (Canada's principal residence exemption) becomes one of the biggest tax advantages available to a Canadian family.

Rent the home, own your savings

The version of renting I'm advocating for is not "spend everything and hope." It's deliberate:

• Rent a place that fits your life, not the maximum you can afford.
• Automate savings the same way a homeowner is forced to pay the mortgage.
• Fill your FHSA every year. Use your TFSA. Keep contributing.
• Invest for growth, not just savings-account interest. Boring index funds are fine.
• When you're ready — when the "7-year answer" turns to yes — buy with a strong down payment and low stress.

A gentle reframe

Buying a home is a beautiful thing, and for many of the families I work with, it's the single best financial move of their lives. But it works because they bought at the right time, in the right place, for the right length of time. Not because owning beats renting on some universal scoreboard.

If your life right now says "maybe two more years, maybe five," give yourself permission to rent well and save aggressively. When you do buy, you'll buy from a position of strength — better down payment, better mortgage terms, less stress, and a home you plan to keep long enough for the math to actually work in your favour.

This is general education, not personalized financial or investment advice. Talk to a licensed advisor about your own situation.