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Written By
Corinna Frattini
Oct 29, 2025
•Homeownership Pathway
Many newcomers to Canada eventually face a big question: should you keep renting, or is it time to buy your first home? Deciding whether to rent versus buy a home in Canada is a personal choice that depends on your finances, lifestyle, and long-term goals. Both options have pros and cons, and understanding them is the first step to making a smart housing decision. If you decide homeownership is the path for you, learn how to get pre-approved for a mortgage so you know how much you can afford.
According to Statistics Canada, approximately two-thirds of Canadians (66%) own their homes, reflecting the high value people place on homeownership, even as affordability challenges persist.
| PROS OF RENTING | CONS OF RENTING |
|---|---|
| Flexibility: Easier to move if your job or personal circumstances change. Ideal for short-term or uncertain plans. | No equity growth: Rent payments do not contribute to wealth or property ownership. |
| Lower upfront costs: No down payment or major repairs required. | Lease restrictions: The terms of the lease may limit certain activities, and you must comply with all rules set by the landlord. |
| Access to premium areas: Rent in neighbourhoods where buying may be unaffordable. | Limited control over the property: You usually cannot renovate, paint, or make changes without approval from your landlord. |
| Lower additional costs: Insurance is only for contents, not the building. | Lease uncertainty: Landlords do not have to renew your lease, so you may need to move when your lease expires. |
As of 2025, the average rent for a one-bedroom apartment in Canada is about $2,000 per month, with prices higher in cities like Toronto and Vancouver.
According to recent surveys, approximately 75% of newcomers aim to buy a home within 3 – 5 years of arriving in Canada. However, you need to weigh the pros and cons before rushing into a decision.
| PROS OF BUYING A HOME | CONS OF BUYING |
|---|---|
| Equity and wealth creation: Monthly mortgage payments build ownership in your property. | High upfront costs: down payment, closing costs, and home inspections. |
| Security and stability: Owning your home gives long-term control over your living space. | Financial responsibility: Mortgage repayments, taxes, insurance, and maintenance are ongoing obligations. |
| Potential appreciation: Homes can increase in value over time, creating profit when sold. | Reduced mobility: Selling a home can take a long time compared to ending a lease. |
| Freedom to customize: Renovate, decorate, and improve your house as you wish. | Market risk: Home value may fluctuate due to interest rates or economic conditions. |
| Credit benefits: Timely mortgage payments improve your Canadian credit profile. |
The Canadian Real Estate Association reports the average home price in Canada was approximately $750,000 in 2025, highlighting the importance of budgeting carefully before buying.
Anna Prokofieva, a former newcomer from Ukraine, explains:
“I decided to buy because paying for equity is better than paying rent. Renting gave me flexibility, but I wanted freedom and long-term security. I carefully evaluated my finances, future needs, location, and type of housing before making the decision. The most important thing for me was to establish credit in Canada from the moment I arrived.”
After Prokofieva decided to buy, she got pre-approved for the mortgage, so she knew what she could afford.
A recent Scotiabank survey found that 45% of newcomers identify a lack of credit history as their biggest obstacle to buying a home in Canada.
Read next: How to Build Credit in Canada: A Guide for Newcomers
Join us for an insightful webinar designed to help you navigate the various routes to owning a home in Canada. Whether you’re looking to buy your first home through a traditional mortgage, exploring co-ownership opportunities, or interested in rent-to-own solutions, this webinar will provide the information and tools you need to make informed decisions.
REGISTER FOR THE WEBINARGetting pre-approved for a mortgage in Canada is a vital first step when you’re ready to buy a home, especially for newcomers who want to understand how much they can afford and strengthen their home-buying credibility.
Here’s a clear, step-by-step breakdown:
Before you apply, take stock of your finances:
💡 Tip: If you’re new to Canada, establishing credit history (through a credit card or small loan) can help you qualify more easily.
Lenders need documents to verify your financial situation. Common requirements include:
You can apply for pre-approval with:
The lender will review your financial details, credit score, and debt-to-income ratio to determine how much they’re willing to lend and at what interest rate.
Tip for Newcomers: Build a Canadian credit history early. You can start by opening a bank account before arrival. Learn more in our Guide to Building Credit in Canada
If you qualify, the lender gives you a Pre-Approval Letter, which confirms:
This letter shows real estate agents and sellers that you’re a serious buyer.
Once pre-approved, you can:
Use the Scotiabank Rent or Own Calculator to see whether renting or buying makes the most sense for your financial situation.
If you’d like to learn more about your homebuying options, join our free home ownership for newcomers webinar.
Many newcomers aim to buy within 3 – 5 years of arriving. However, timing depends on your finances, credit history, job stability, and comfort with local housing markets.
Yes, Canadian banks typically require a credit history. You can start building a credit history when you open a Canadian bank account and manage credit responsibly.
It depends on your savings, income, and local housing prices. As of 2025, average home prices in Canada remain high, with many newcomers weighing rent versus buying decisions carefully.
Beyond your mortgage, expect property taxes, insurance, maintenance, and possibly condo fees. Budgeting for these costs is vital.
Not necessarily. Renting provides flexibility, access to desirable neighborhoods, and lower upfront costs. It can also give newcomers time to save for a down payment and establish credit.
Deciding whether to rent or buy a home in Canada is a personal choice that depends on your finances, lifestyle, and long-term goals.
For some newcomers, the journey to homeownership takes time, and that’s okay. Whether you start by renting, buying, or exploring a rent-to-own option, or a home co-ownership option. Each path can bring you closer to your goals.
Learn how a rent-to-own program can bridge the gap between renting and buying in our post: Can Newcomers Rent-to-Own a Home in Canada
Before making a decision, carefully evaluate your financial situation, establish a Canadian credit history, and use tools like the Scotiabank Rent or Own Calculator to guide your choice. Sound planning ensures your housing decision supports your life and financial goals in Canada.
WRITTEN BY
Corinna Frattini
Senior Editor and Content Director, Prepare for Canada
Corinna researches and writes content to help newcomers make informed decisions about housing, employment, banking, and aspects of settling in Canada. With a background in human resources and leadership development, her articles focus on how newcomers can continue their careers in Canada. Her writing combines research, practical guidance, and clear language to support newcomers on their journey.
© Prepare for Canada 2025
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