5 Reasons why renting is a better option than mortgage

At one time, Vancouver used to be really expensive in Canada, especially in terms of buying a home. Whether the arrival of people from Hong Kong in the late 90s following the transfer of the territory’s sovereignty to the People’s Republic of China in 1997 is to be blamed for the rise of Vancouver’s real estate prices or not, the city did face a serious problem.

Fast forward from that era and the 2000s in between to now, the year 2021; Toronto is doing its best to rise following the 2020 COVID-19 Novel Coronavirus pandemic, which sent businesses into lockdown for most of the year. The city’s housing prices took a sharp rise starting from 2017, for which the residents are beyond angry; they are disappointed.

The late Rob Ford did his level best to control the city’s spiralling residential real estate prices. He did implement rent controls which were later carried forward by his successor John Tory. Yet, the prices rose to a margin that questions the sustainability and liveability of a city like Toronto, whose growth is set to leave Buffalo in New York State, behind.

Is renting advantageous for millennials and other home owning hopefuls in comparison to taking out a mortgage?

Millennials in Toronto are living with their parents these days. Why? Because housing prices in Toronto are mirroring the situation of Vancouver. The millennials aren’t lazy, the housing in Toronto is beyond anyone’s reach.

Moreover, stringent rules of the credit stress test make it even hard for anyone to qualify for a mortgage. If any prospective house buyer wishes to buy a home (a townhouse, a condo unit from a list of Toronto condos for sale), an apartment, a loft or a row house, how many bills they have along with their pay and other expenses are taken into account.

The rest of this thing, people understand because taking a mortgage for a home in Toronto, is now a herculean task.

What could be a life-saving alternative in comparison to a mortgage especially in Toronto?

Torontonians, especially millennials, who are not sure whether they should purchase their own home or not, there is good news for them. Renting, in comparison to taking out a mortgage, is a viable option for them at the moment.

A key advantage of residents living in a rental property on rent is that they can save on keeping it in shape. They can potentially avoid incurring any recurring expenses. Moreover, other expenses like insurance, taxes as well as maintenance fees are not much of trouble to renters too.

Is renting much feasible in comparison to taking out a mortgage in Toronto?

Those who desire extra flexibility and least responsibility when living in a home, renting can be quite an ideal option. While purchasing a home requires a lot of saving and thorough commitment, renting can help many maintain their lifestyle and flexibility along with their finances.

Torontonians are residents of one of the world’s most expensive housing markets. Renting a house in Toronto can be an easy way for residents to get a space they want, without the need of spending a lot of time to save for an exorbitant down payment.

Renting also gives residents slightly more relaxation in comparison to homeownership, regardless of whether they live in an apartment or in a house.

It avoids residents from getting tied to one property for a long time, as a mortgage would probably do. Moreover, residents won’t be responsible for saving money for key repairs, paying property tax, paying for home insurance and being in line with other costs too.

Advantages of living on rent in Toronto compared to taking a mortgage

One thing is certain, living on rent gives residents a home free of ownership strains. It is also an easy way of living in a home without any inconvenience. Now let us explore some reasons why renting a home in Toronto is much better than taking a mortgage:

No need to bear any expenses for repair or maintenance (or both).

A key benefits of living in a home on rent is no need for residents to bear repair and maintenance costs. Why? Because landlords must take complete responsibility for all expenses regarding maintenance, improvement and repairs.

If any kitchen appliance breaks down, the roof leaks, wallpaper peels off, bathroom floor has cracks or vice versa, residents only need to contact their landlord because of the reason mentioned earlier.

Comparatively, homeowners pay for anything that happens to their home i.e. roof repairs, plumbing works, painting service and other home repairs & improvements are borne by them. Same goes for renovation expenses. The cost of these works depends on how severe or not severe the work is whether more repair works come or not. From the homeowner’s perspective, these works are costly.

No need to bear property tax

Another major advantage of living on rent is that residents have no need to pay property taxes. In comparison, Homeowners must pay property taxes timely regardless of where they live. If they live in an affluent suburb or a city area having expensive land value, then they must pay a hefty amount of tax.

Each district, suburb, city & province in Canada has different rates for taxes (same goes for property tax). Each town, city and its associated conurbation has areas where property tax expenses can amount up to thousands of Canadian dollars annually.

Though property tax calculations are complicated, they are often measured based on the property’s accurate estimated value and the amount of land it was built on. Newly constructed homes are getting large hence taxes in this manner can be cumbersome for homeowners in the coming times.

Location Flexibility

Residents living on rent can live anywhere they wish. Homeowners are unable to do that because they own a property in a certain part of the city. Living in Toronto proper is unreachable for numerous prospective home buyers. But those looking for a home on rent can do so with ease.

There is however a catch; expensive and affluent areas are expensive due to high rent costs compared to areas that are not expensive. Yet, renters can easily find homes having affordable rent payments.

Reduced insurance expenses

Homeowner’s insurance policy should always be maintained by homeowners and for renters, there is a renter’s insurance policy. The latter is much more affordable in comparison to the former and covers almost everything; furniture, valuables, appliances, electronics and personal goods.

On average, the renter’s insurance policy costs almost C$ 180 annually while a homeowner’s insurance policy costs C$ 1300 annually, as determined by insurance and real estate professionals.

No need to pay any down payment

Residents living on rent have another financial advantage; they usually must pay a security deposit equivalent to a month’s rent. That amount is usually returned to them when they move out of that property into another one but one condition i.e. they did not damage anything in that property.

A down payment is always necessary when home buyers apply for a mortgage (and when it gets approved, that is). The amount for it is usually almost 20 percent of the home’s value. This payment does result in residents having equity in the home but it only rises once the mortgage is paid off gradually.

Completely paying off a mortgage helps residents obtain a valuable investment renters do not get. But given the fact that homes in Toronto are now the most expensive in the nation, renters are at an advantage i.e. do not have to pay a hefty down payment when living on rent. However, their security deposit is dependent on the amount of rent they must pay.


Typically, living on rent in a home is frowned upon but in current market conditions of Toronto, it is necessary if residents wish to live in an individual home. This is why millennials in good old T-Dot should definitely consider living on rent if they wish to avoid the hefty expenses of a mortgage whilst living decently in a home.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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