Toronto, Vancouver and Montréal condos break even with rent at a 4.4% to 4.8% mortgage rate in 2026

According to Princeps data, a one-bedroom condo in the Toronto area breaks even with renting at a mortgage rate of 4.73%, based on units listed for sale and for rent in the same 1,415 buildings from July to September 2026. That is the rate at which a buyer with 20% down pays as much in interest, condo fees and property tax as a tenant pays in rent. Uninsured mortgages fixed for five years or more averaged 4.49% on new loans in July, the latest month the Bank of Canada has published, and fixed rates have risen since. Before counting the down payment, owning a condo and renting one now cost about the same.

That balance is fragile. Asking rents have fallen for two years, national condo prices are falling, and bond markets now expect the Bank of Canada's next move to be a hike. Its next decision is on October 28.

Key takeaways, as of October 8, 2026:

• The median one-bedroom condo building breaks even at a mortgage rate of 4.73% in the Toronto area, 4.78% in Metro Vancouver and 4.76% in Montréal. Two-bedrooms break even lower, at 4.41% to 4.54%.
• Uninsured mortgages fixed for five years or more averaged 4.49% on new loans in July 2026, up from 4.17% in April, according to the Bank of Canada.
• Counting what the down payment could earn in government bonds, renting is cheaper in more than seven of every ten buildings in all three cities.
• Ottawa-Gatineau is the exception: its condos break even at 5.28% for a one-bedroom and 5.60% for a two-bedroom.
• Each quarter-point rise in mortgage rates adds about $83 a month to the interest on a typical Toronto-area one-bedroom.

Owning a condo costs about the same as renting one in the same building

Comparing a city's average rent with its average price mixes downtown rentals with suburban sales. These figures compare like with like: units with the same number of bedrooms in the same building, listed for sale or for rent from July to September 2026. The break-even rate is the mortgage rate at which a year of interest on an 80% mortgage, plus that building's condo fees and property tax, equals a year of its rent. Principal is left out, because paying it down is saving, not spending. One-bedrooms include one-bedroom-plus-den units, and furnished rentals are left out. Break-even mortgage rates for condos listed from July to September 2026:

Across these Toronto-area buildings, the median one-bedroom asks about $497,000 to buy and $2,350 a month to rent. At July's 4.49% rate, owning costs slightly less than renting in the median building. For two-bedrooms in the three cities, the break-even rate sits within about a tenth of a point of July's mortgage rate: effectively a tie.

These rates leave out land transfer tax, closing and selling costs, and repairs inside the unit, and they assume the condo sells for what it cost. That last assumption has been generous lately: the national Princeps condo index was down 12.0% in the year to August 2026, though Quebec's rose 12.1%.

Mortgage rates are climbing toward the break-even

A buyer with 20% down takes an uninsured mortgage. The Bank of Canada reports that uninsured mortgages fixed for five years or more averaged 4.49% on new loans in July 2026, up from 4.17% in April. Fixed mortgage rates track five-year Government of Canada bond yields, and those averaged 3.16% in July and 3.61% in the first week of October. Today's fixed rates are therefore likely above July's, and two-bedroom condos in the three largest cities have probably already tipped toward renting.

The Bank of Canada's own policy rate is still 2.25%, and bond markets are pricing hikes before the Bank has made one. Each quarter point matters: on a typical Toronto-area one-bedroom, a $398,000 mortgage on a $497,000 condo, it adds about $83 a month in interest.

Count the down payment, and renting wins in most buildings

The break-even rate above treats the down payment as free. It is not. A buyer who puts about $99,500 into a $497,000 condo gives up what that money could earn elsewhere. At the 3.61% that five-year Government of Canada bonds averaged in early October, that is about $300 a month.

Counting it lowers every break-even rate in the table by about 0.9 points: to 3.82% for a Toronto-area one-bedroom, 3.88% in Metro Vancouver and 3.86% in Montréal, and to between 3.50% and 3.63% for two-bedrooms in the three cities. All of those sit well below July's 4.49% mortgage rate. On that basis, renting is cheaper in more than seven of every ten buildings in the Toronto area, Metro Vancouver and Montréal, for one-bedrooms and two-bedrooms alike.

Rents are falling fastest for condos

Average asking rents in Canada fell 4.2% in the year to September 2026, to $2,034, a second full year of annual declines, according to Rentals.ca and Urbanation, as reported by Canadian Mortgage Trends. Condo apartments fell hardest, down 7.8% to $2,052, against 2.7% for purpose-built rentals.

A falling rent lowers the break-even rate, and a falling price raises it. With both dropping, the next few months of each will matter as much as the Bank of Canada's decision.

Ottawa leans toward owning

Of the six metro areas in the table, Ottawa-Gatineau is the one where owning clearly wins. A one-bedroom there breaks even at 5.28% and a two-bedroom at 5.60%, because rents are high relative to prices: across its buildings, the median one-bedroom asks about $350,000 to buy and $2,050 a month to rent. Counting the down payment, its break-even rates fall to 4.37% and 4.70%, close to July's mortgage rate, so owning and renting come out roughly even. Hamilton and Kitchener-Cambridge-Waterloo sit close to the three largest cities, slightly higher for one-bedrooms.

What this means for renters, buyers and investors

For renters in Toronto, Vancouver and Montréal, there is little financial penalty for waiting: renting costs about the same as owning the same unit before the down payment is counted, and less in most buildings once it is.

For buyers, the answer depends on the building and the rate you can lock: a building whose break-even rate sits well above your mortgage rate is cheaper to own. The Princeps Analyst can pull the asking prices, rents and condo fees for any building.

For investors, a break-even rate this close to the mortgage rate means a condo bought with 20% down barely covers its interest, fees and tax from rent, before vacancy and repairs.

Frequently asked questions

Is it cheaper to rent or buy a condo in Canada in 2026? In the Toronto area, Metro Vancouver and Montréal, owning and renting the same condo cost about the same at mortgage rates near 4.5%, before counting the down payment. Counting what the down payment could earn in government bonds, renting is cheaper in more than seven of every ten buildings.

What mortgage rate makes buying a condo cheaper than renting in Toronto? For a one-bedroom in the median Toronto-area building, 4.73% with 20% down, based on condos listed from July to September 2026. For a two-bedroom, 4.49%. Counting the down payment's forgone return, those fall to 3.82% and 3.58%.

Are condo rents falling in Canada? Yes. Condo apartment asking rents fell 7.8% in the year to September 2026, to an average of $2,052, according to Rentals.ca and Urbanation. All asking rents fell 4.2%.

What to watch next

The Bank of Canada decides rates on October 28; a hike, or signals of more, would push fixed rates further above the typical two-bedroom break-even. The Bank's new-lending rates for August and September will show how far fixed rates have already moved, and Rentals.ca's October report, due in early November, will show whether condo rents are still falling faster than purpose-built rents. We will update these break-even rates as the market moves them.