When renting is the smarter choice

Last reviewed October 30, 2026

A home buying guide telling you not to buy? Yes. Buying at the wrong time, or for the wrong reasons, is one of the most expensive mistakes people make, and a good agent would rather you buy when it's right. Here's when renting genuinely wins.

1. You might move within a few years

Buying and selling cost thousands: land transfer tax, legal fees, commission, moving. If there's a real chance you'll leave London, or need a different home, within two or three years, those costs can easily outweigh any gain. Renting keeps you flexible. See break-even.

2. Your income is uncertain

Probationary periods, contract work, a new business, or an industry going through layoffs all make it harder to get a mortgage and riskier to carry one. Renting while your income stabilizes is prudent.

3. Buying would leave you with no cushion

If your down payment and closing costs would empty your savings, a single surprise, like a furnace failure, a job loss or a special assessment, could put you in a tough spot. Most advisors suggest keeping an emergency fund of several months' expenses after you buy.

4. You're new to London

If you've just moved to the city, renting for six to twelve months lets you learn the neighbourhoods, your commute and your preferences before committing. Buying immediately in an unfamiliar city raises the risk of choosing an area that doesn't suit you.

5. Your life is about to change

A new relationship, a separation, a baby on the way, or kids about to leave home all change what kind of home you need. It's often better to wait until the picture is clearer.

6. You have a great rental deal

If you've been in a rent-controlled unit for years and pay well below market, your housing costs may be hard to beat by buying, at least for now. Just remember that the deal only lasts as long as the tenancy does.

7. You're a disciplined investor

If renting is cheaper and you reliably invest the difference, plus the money you'd otherwise have put into a down payment, renting can build comparable wealth. The key word is reliably. Automatic monthly contributions to a TFSA or FHSA make it real.

How to rent strategically

• Save on purpose. Automate contributions to an FHSA or TFSA each payday.
• Build your credit. Pay bills on time and keep balances low. Lenders will check.
• Learn the market. Watch listings and recent sales in neighbourhoods you like, so you'll recognize a good opportunity.
• Know your rights. The Landlord and Tenant Board's guides explain Ontario tenant protections.
• Set a review date. Revisit the rent-or-buy decision every year, or whenever your life changes.

When the scales tip toward buying

Signs it might be time to look seriously: you expect to stay in London five years or more, your income is stable, you have a down payment and an emergency fund, and the monthly cost of owning a suitable home is close to what you pay in rent. If that sounds like you, see from renter to owner.

Renting isn't failing

There's a lot of social pressure to buy, from family, friends and social media. But renting while you build savings, stabilize your income or figure out where you want to live is a sensible financial choice, not a failure. The goal is to own when it's right for you, not as soon as possible.