Rent, and when it stops

From the All the Numbers wiki · Housing

Rent used to be something you folded into living expenses. It is now a line of its own, because two questions need it separately:

  • What does the plan cost while you rent?
  • Would you be better off renting than buying? — the crossover view compares the plan you have against the same plan that never buys (see rent versus buy), and that comparison is meaningless if rent is buried in another number.

What the engine does

  • Charges the rent every month between its start and its end.
  • Grows it once a year, the way a lease renews, at its own growth rate. Leave the rate blank and it follows the plan's inflation, 2.5% a year by default;[1] set it to zero to freeze it in nominal terms.
  • Ends it at the first home purchase by default. A month either pays rent or carries a home; charging both is the modelling error this rule exists to prevent, and it is the one that quietly makes buying look worse than it is.
  • Restarts in the sale month. A sale closes on the first day of its month, so a household that sells its home goes back to renting from that month, at the rent it would pay had it rented all along. It pays rent in no month it owns a home, and a cottage never stops the rent.[2]
  • Reports it on every month and year row, so the yearly table can show it beside housing.

What to do if you would keep renting

Give the rent an explicit end date. An explicit date always wins over the default — someone who buys a home to move into later, or who sells and goes back to renting, is a plan the engine must not overrule. The warning tells you the default applied so the choice is yours rather than ours.

What it deliberately does not model

A rent that changes for a reason other than annual growth — a move, a roommate leaving, rent control ending — is not modelled. Use two plans and compare them, or set the growth rate to the average you expect over the horizon.

Rent you pay is a different thing from rent you collect from a suite in your own home, which is income and is taxed.

See also: selling a home, would a lender write the mortgage.

See also

  • Home prices over time · A home's value is projected by growing it at one assumed rate, 3.5% a year by default, which is PWL Capital's 1% real return on a house plus 2.5% inflation. It is an editable assumption, not a forecast, and the Simulation view shows how widely a real home's value varies around it. A home added to a plan starts at $600,000 with 20% down until you enter its own figures.
  • Renting out a suite · Rent from part of your home is taxable income. The costs of the whole home are deductible only for the rented share, mortgage principal and land transfer tax are not deductible, and a loss offsets other income when the rental is run to earn money. A lender may count part of the rent when you apply.
  • Renting versus buying · All the Numbers compares a plan that buys a home with the same plan that never buys, and the money the home would have taken stays in your accounts and is saved like any other leftover cash. It shows when owning pulls ahead on net worth, if it does. It is a comparison under assumptions, not a verdict.
  • Selling a home · A sale turns the home's projected market value into cash after selling costs (your province's typical commission, the sales tax on it and legal fees) and the mortgage payout. The gain on a principal residence is exempt from tax, apart from the part that was rented out when the exemption does not cover it.
  • Would a lender write the mortgage? · Lenders test a mortgage against two ratios, GDS at 39% and TDS at 44% of gross income, using a stress-test rate of the contract rate plus 2 points or 5.25%, whichever is higher. All the Numbers runs this screen on the income entered for today.

References

  1. ↑PWL Capital — Financial Planning Assumptions (Market Capitalization Weighted Portfolio), mid-year 2026 data update, Table 1 (Expected Inflation Composition) · Assumed long-run CPI inflation: half Canadian historical inflation since 1900, half the Bank of Canada target (PWL Capital, Financial Planning Assumptions, Table 1) · 2.5% · effective 2026-08-17
  2. ↑FP Canada / IQPF Projection Assumption Guidelines (projections run on the planner's chosen assumptions) · A household that sells its only home goes back to renting from the sale month itself, at the rent it would be paying had it rented all along (the plan's rent grown at its own rate from the plan's start); it pays rent in no month it owns a home, and a cottage never stops the rent · effective 2026-10-13