Renting vs Buying in Niagara: Is This Your Year to Buy?

If you’re renting in Niagara, you’ve probably wondered at some point whether you’d be better off buying.

It’s tempting to compare your rent directly to a mortgage payment, but that doesn’t tell you the whole story. Buying comes with property taxes, insurance, maintenance and upfront closing costs. Renting doesn’t build equity, but it gives you flexibility and usually comes with fewer unexpected expenses.

So which one makes more sense?

It depends on your finances, your plans for the next few years and what you actually want from your living situation.

If buying is something you’re considering, start by figuring out how much house you can actually afford and whether you qualify for any first-time home buyer programs.

When Does Renting Make Sense?

Renting isn’t automatically throwing money away.

It can make a lot of sense if you’re not sure where you’ll be in a few years, your job situation could change, or you’re still building your savings.

It also gives you flexibility. If you decide you want to move to another city or need a different type of home, you’re generally not dealing with the costs and process of selling a property first.

Renting may make sense if:

• You aren’t sure you’ll stay in Niagara long-term.
• You’re still saving for a down payment and closing costs.
• Buying would use almost all of your savings.
• Your income or employment situation may change.
• You don’t want the responsibility of maintaining a home right now.

There is nothing wrong with renting while you get yourself into a stronger position to buy.

When Does Buying Make Sense?

Buying starts to become more appealing when your finances are in a good place and you expect to stay put for a while.

Part of each mortgage payment goes toward paying down the principal on your loan, which helps you build equity over time. You also have more control over your home and aren’t dealing with the possibility of needing to move because your landlord decides to sell or make other changes permitted under Ontario’s tenancy laws.

But ownership comes with responsibility.

If the furnace stops working, the roof needs replacing or the basement starts leaking, those expenses belong to you.

That’s why we don’t recommend deciding whether you can afford a house based on the mortgage payment alone.

Don’t Compare Rent to Just the Mortgage

Let’s say you’re paying $2,200 per month in rent and you’re looking at a home with an estimated mortgage payment of $2,500.

At first glance, buying might look like it only costs an extra $300 per month.

But you still need to account for things like:

• Property taxes
• Home insurance
• Utilities
• Repairs and maintenance
• Condo fees, if applicable
• Closing costs when you purchase

On the other hand, your mortgage payment isn’t the same as rent either. A portion of your mortgage payment reduces the amount you owe on the home.

That’s why the comparison needs to be based on the full picture.

Your Timeline Matters

How long you expect to stay in the home is another big part of the decision.

Buying and selling both come with costs. When you buy, there may be legal fees, land transfer tax and other closing expenses. When you eventually sell, there are selling costs to consider too.

• If you think you may want to move again fairly soon, buying may not always be the best financial choice.
• If you expect to stay for several years, the calculation can start to look very different.

There isn’t one magic number of years that works for everyone. Your purchase price, mortgage, future selling price and other costs all affect the answer.

Where You Buy in Niagara Makes a Difference

One advantage Niagara buyers have is choice.

Your budget can look very different depending on where you search. Niagara Falls, St. Catharines, Welland, Fort Erie, Thorold, Pelham and Niagara-on-the-Lake don’t all have the same home prices.

You may find that the type of home you want feels out of reach in one community but much more realistic somewhere else.

That doesn’t mean you should choose a neighbourhood based on price alone.

Think about your commute, family, schools, lifestyle and what you actually want to be close to. If schools are an important part of your move, our Niagara school districts guide is another helpful place to start.

What About Waiting for a Bigger Down Payment?

Sometimes waiting is the right decision. Sometimes it isn’t.

If buying today would leave you with almost nothing in savings, giving yourself more time can put you in a much more comfortable position.

But don’t assume you need a 20% down payment before you’re allowed to start looking.

Depending on your situation and the purchase price, you may be able to buy with less than 20% down. First-time buyers may also have programs and savings tools available to help with the process.

The important part is knowing your own numbers before deciding you’re either ready or not ready.

Before You Decide

1. Figure out what buying would actually cost you each month. Include more than the mortgage payment.
2. Look at your savings after closing. Don’t forget about your down payment, closing costs and emergency savings.
3. Think about the next few years. If you already know a major move is likely, factor that into your decision.
4. Compare different Niagara communities. Your budget may go further than you expect if you’re flexible about location.
5. Don’t buy just because you think you’re supposed to. A home is a major financial commitment. Buy when the numbers and the timing work for you.

Frequently Asked Questions

How much money do I need before buying?

That depends on the price of the home and your financing. Your down payment isn’t the only expense to plan for. You’ll also want money available for closing costs and expenses that can come up after you move in.

Can The Barry Team help me figure out if I’m ready to buy?

Yes. We can help you understand current Niagara home prices, look at what your budget could realistically buy and connect you with a mortgage professional when you’re ready to run the financing numbers.

Wondering What You Could Afford in Niagara?

You don’t have to be completely sure you’re ready to buy before you start asking questions.

We can show you what homes are selling for in the areas you’re considering and help you get a better idea of what buying would actually look like for you.

Curious about your next steps? Visit Buy With Us, call 905-357-8067, or email emily@thebarryteam.ca.