By Felix OyelekeREALTOR · eXp Realty · Newfoundland & Labrador
November 1, 2026 · 14 min read
Renting vs buying in St. John's
Renting and buying are not two versions of the same decision. Renting buys flexibility and a ceiling on your housing risk. Buying buys control and a stake in an asset, and it adds costs and risks that renting does not carry. The right choice depends on how long you will stay, how stable your income is, how much cash you have, and how much uncertainty you can carry. This guide works through the monthly arithmetic honestly, then through the tenancy rules that shape renting in Newfoundland and Labrador, and then through rent to own, which is often sold as a middle path and is the riskiest of the three.
A note on rental figures first. This guide does not invent asking rents. Where rental market figures are needed, the reliable source is the Canada Mortgage and Housing Corporation Rental Market Survey, which reports achieved rents from a published survey, not asking prices from listings. Asking rents on listings can be higher or lower than achieved rents, and a single listing is not a market. Before you use any rent figure in a decision, check the latest CMHC survey for St. John's and compare it with current listings, and be clear about which one you are using. The worked examples below use clearly labelled illustrative figures, not market data, so that the method is visible even though the inputs will differ for your situation.
The monthly arithmetic, worked step by step
Take a household deciding between renting a home and buying a similar home in St. John's. The comparison only works if you compare total monthly cost, not rent against mortgage payment alone. Rent is close to a total housing cost, apart from tenant insurance and utilities that may or may not be included. A mortgage payment is only part of owning cost. Property tax, insurance, maintenance, and sometimes condo fees sit on top of it.
Start with renting, using an illustrative rent of $1,800 per month, with heat and light included, and tenant insurance of $30 per month. Total monthly housing cost on that illustration is $1,830. There is no property tax bill, no roof to replace, and no maintenance reserve in that figure, because those are the landlord's costs, not the tenant's, although they are reflected in the rent over time.
Now take buying, using an illustrative purchase price of $400,000, which is an example only and not a market figure. With a 5 percent down payment, the down payment is $20,000, and the mortgage is $380,000 before mortgage insurance, which applies on a down payment below 20 percent and adds to the amount financed. At an illustrative mortgage rate of 4.5 percent over a 25 year amortization, the monthly mortgage payment is about $2,105. That figure alone already exceeds the illustrative rent, and it is not the full owning cost.
Add property tax. At the City of St. John's 2026 residential mil rate of 9.1 mils for properties with water and sewer service, tax on an assessed value of $400,000 is $400,000 multiplied by 9.1 divided by 1,000, which is $3,640 per year, or about $303 per month, before water tax, which is billed separately. Add home insurance, illustrated at $150 per month, and a maintenance reserve. A common planning rule is to allow 1 percent of the home's value per year for maintenance, which on $400,000 is $4,000 per year, or about $333 per month, although actual maintenance varies greatly by age and condition. Add those to the mortgage payment: $2,105 plus $303 plus $150 plus $333 is about $2,891 per month, against $1,830 to rent in this illustration.
That gap does not mean renting is always better. Buying also builds equity, because part of each mortgage payment repays principal, and the home may rise in value, although it may also fall. Renting builds no equity, and rent can rise, subject to the rules below. The honest comparison therefore has two parts: monthly cash cost, where renting often wins in the early years, and long term wealth, where buying can win if the buyer stays long enough for equity and appreciation to outweigh the higher monthly cost and the transaction costs of buying and selling. Transaction costs matter: land transfer tax does not apply in Newfoundland and Labrador in the way it does in some provinces, but legal fees, registration fees, inspection, appraisal, and moving costs still apply, and selling costs apply again when you leave. A buyer who stays two years and then sells will often lose money on those costs alone, even if the home holds its value.
The break even question is therefore about time. If you are confident you will stay in St. John's, in the same home, for seven to ten years, and you have a stable income and a cash reserve beyond the down payment, buying starts to make financial sense in many cases. If you may move in two or three years, if your income is uncertain, or if you have no reserve for a roof or a furnace, renting is usually the safer financial choice, even if the monthly rent looks high. Flexibility has a value, and in an uncertain period of life it can be worth more than equity.
What renting actually costs beyond the rent
Renters sometimes underestimate their own costs, and buyers sometimes overestimate them. On the renting side, check what is included: heat, light, water, parking, snow clearing, laundry, and internet are sometimes included and sometimes not, and the difference can be several hundred dollars a month. Check tenant insurance requirements in the lease, and check parking costs separately, because parking in St. John's in winter is not a minor detail.
On the buying side, the costs that surprise new owners are the ones that do not appear in a mortgage calculator: property tax, which is assessed value multiplied by the mil rate divided by 1,000, and which uses a valuation date of January 1, 2024 for the 2026 to 2027 assessments in St. John's, so it reflects market conditions at that date; water tax, billed separately; home insurance, which is higher for older homes and for homes with oil heat or wood stoves; and maintenance, which arrives in lumps rather than monthly, such as a roof, a furnace, or a driveway. A buyer who can afford the mortgage payment but not a $10,000 roof in year three cannot afford the home on the terms they assumed.
Down payment help exists for first time buyers, and it changes the arithmetic, but it does not remove the monthly cost problem. The First Home Savings Account allows contributions of up to $8,000 per year to a lifetime limit of $40,000, with tax deductible contributions and tax free qualifying withdrawals. The Home Buyers' Plan allows withdrawals of up to $60,000 from RRSPs, repayable over 15 years, with repayments starting in the fifth year after withdrawal for first withdrawals between January 1, 2026 and December 31, 2028. The Home Buyers' Amount is a $10,000 claim worth about $1,400 in 2026 at the 14 percent lowest federal rate. For new homes, the first time buyers' GST rebate can return up to $50,000 of the federal GST on a home up to $1 million, phasing out to $1.5 million, for agreements entered into on or after March 20, 2025 and before 2031. These programmes help with the deposit and with tax, but they do not reduce the mortgage payment to the level of rent, and borrowed down payment help must be repaid. This guide is general information only, not tax or financial advice, and a buyer should confirm their own eligibility with the Canada Revenue Agency and with a mortgage professional.
Tenancy rules in Newfoundland and Labrador
Renting in Newfoundland and Labrador is governed by the Residential Tenancies Act, 2018, administered through the province's Residential Tenancies process. The rules below are summaries for planning purposes, and the Act and the official forms prevail over any summary. If a dispute arises, the official process, not this guide, decides it.
There is no rent cap in Newfoundland and Labrador at present. The Act sets no limit on the amount of an increase, but it limits when and how often rent can rise, and it requires written notice. A landlord may increase rent at most once in 12 months, and may not increase rent during a fixed term tenancy or in the first 12 months of a tenancy. For a week to week tenancy, the landlord must give not less than 8 weeks' written notice before the effective date of an increase. For a month to month tenancy, the landlord must give not less than 6 months' written notice. For a fixed term tenancy, the landlord must give not less than 6 months' written notice. Those notice periods come from the province's own summary of section 16 of the Act. They are longer than the notice periods some secondary guides state, and they are worth knowing, because a rent increase given with too little notice does not take effect on the date stated.
Termination notice is a different set of periods, and confusing the two is common. For a landlord ending a tenancy without cause, the notice is not less than 4 weeks before the end of the rental period for a week to week tenancy, not less than 3 months before the end of the rental period for a month to month tenancy, and not less than 3 months before the end of the fixed term for a fixed term tenancy. For a tenant ending a tenancy, the notice is not less than 7 days for week to week, not less than 1 month for month to month, and not less than 2 months for a fixed term tenancy. A fixed term tenancy does not automatically end on its expiry date: if the tenant stays and nobody gives notice, the law treats it as continuing on a month to month basis under the same terms, and the month to month rules then apply.
Security deposits are capped. For a monthly tenancy, the deposit can be no more than three quarters of the first month's rent. For a weekly tenancy, it can be no more than two weeks' rent. A landlord may not require or accept prepayment of the last month's or last week's rent, and extra money beyond rent counts toward the deposit limit. The deposit must be held in trust, and disputes about deposits go through the Residential Tenancies process. A landlord must give at least 24 hours' written notice before entering a unit, except in an emergency, and entry is generally limited to daytime and early evening hours. Those rules protect both sides: the tenant's privacy, and the landlord's ability to maintain and show the property.
For a buyer who intends to rent out a second unit, these rules are the operating reality of landlording. Rent cannot be raised at will, a tenant cannot be removed at will, and the deposit cannot be used as a general buffer. A two apartment purchase that only works if rent can be raised immediately, or if a tenant can be removed quickly, does not work under these rules. Price that risk into the purchase, and get tenancy advice before you rely on a rent figure.
Rent to own: the middle path that often is not
Rent to own, also called lease to own, is presented as a way to rent now and buy later, with part of the rent credited toward a future purchase. It can work, but it carries risks that neither renting nor buying carries on its own, and a buyer should treat any rent to own offer with caution until a lawyer has reviewed the full agreement.
The first risk is the price. Many rent to own agreements set the future purchase price in advance, or set a formula for it. If the market falls, the buyer may be locked into paying more than the home is worth. If the market rises, the seller may have an incentive to find a reason to end the agreement. Either way, the buyer bears a risk that an ordinary renter does not, without yet owning the home.
The second risk is the credit. Rent to own agreements often describe a portion of rent as a credit toward the purchase, or require an additional option fee. If the buyer fails to complete the purchase for any reason, including failing to obtain financing, losing income, or discovering a defect, that credit and fee are often lost, in whole or in part, depending on the agreement. An ordinary tenant who leaves at the end of a term loses no such credit, because there was none. A rent to own buyer who cannot complete can lose years of payments.
The third risk is maintenance and condition. During the rental period, the agreement may make the buyer responsible for maintenance and repairs, as if they already owned the home, while the seller retains legal ownership. If the roof fails or the furnace dies during that period, the question of who pays can become a dispute, and the buyer may have paid for improvements to a home they do not own.
The fourth risk is financing at the end. Rent to own does not remove the need for a mortgage. At the end of the term, the buyer must still qualify for financing, obtain an appraisal, and close. If lending rules change, if income falls, or if the appraisal comes in below the agreed price, the purchase can fail, and the earlier risks then crystallise.
None of this means rent to own is never appropriate. It can suit a buyer who needs time to build a down payment or repair credit, who has had the agreement reviewed by a lawyer, who understands exactly what is credited, what is lost on failure, who pays for maintenance, and what the purchase price and closing conditions are. But a rent to own offer that is presented verbally, that leaves the price vague, that does not state what happens on failure, or that pressures a quick signature should be treated as a warning sign, not as an opportunity. Get the agreement in writing, get independent legal advice, and do not treat rent to own as renting with a bonus. It is a purchase commitment with a rental phase, and it should be judged as a purchase.
Making the choice
The decision comes down to three questions, answered honestly.
How long will you stay? If the answer is less than three years, renting usually wins on cost and flexibility. If the answer is seven years or more, buying usually wins on equity, provided the monthly cost is affordable with a reserve.
How stable is your income and your cash? Buying requires a down payment, closing costs, and a reserve for repairs. Renting requires first month's rent and a deposit capped at three quarters of a month's rent. If the down payment would leave you with no reserve, you are not ready to buy that home, even if a lender will approve the mortgage.
How much uncertainty can you carry? Renting caps your housing risk at the rent and the notice rules. Buying adds market risk, maintenance risk, and interest rate risk at renewal. Some buyers welcome that risk for the control and equity it brings. Others, rightly, do not, and renting well is a better financial decision than buying badly.
There is no shame in renting, and no virtue in buying at any cost. The best housing decision in St. John's is the one that leaves you able to pay your housing cost every month, to handle a surprise repair or a rent increase within the rules, and to move if life requires it, without a financial crisis. Run the total monthly numbers for your own situation, using your own rent, your own mortgage quote, and your own tax assessment, and let those numbers, not a slogan about renting being wasted money, decide.
Sources
Newfoundland and Labrador House of Assembly, Statutes of Newfoundland and Labrador 2018, Chapter R-14.2, Residential Tenancies Act, 2018, assented to May 31, 2018, in force January 1, 2019: http://www.assembly.nl.ca/Legislation/sr/Annualstatutes/2018/R-14.2.chp.htm
Government of Newfoundland and Labrador, Residential Tenancies Act, 2018, Service NL information page on rights and obligations under the Act: https://www.gov.nl.ca/gs/human-rights-in-residential-tenancies/residential-tenancies-act/
City of St. John's, Tax Rates page, Current Tax Rates table, 2026 residential rate 9.1 mils with water and sewer services: https://www.stjohns.ca/resident-services/property-taxes-assessments/tax-rates/
City of St. John's, Property Assessments page, base date January 1, 2024 for 2026 to 2027 assessment notices: https://www.stjohns.ca/resident-services/property-taxes-assessments/property-assessments/
Canada Revenue Agency, First Home Savings Account (FHSA), $8,000 annual contribution room and $40,000 lifetime limit: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/first-home-savings-account
Canada Revenue Agency, The Home Buyers' Plan, current withdrawal limit $60,000, with temporary repayment relief deferring the start of the 15-year repayment period to the fifth year for first withdrawals between January 1, 2026 and December 31, 2028: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
Canada Revenue Agency, Line 31270, Home buyers' amount, tax year 2025, claim up to $10,000, page details 2026-07-29: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html
Canada Revenue Agency, Who can apply, First-time home buyers' (FTHB) GST/HST rebate, agreements with a builder on or after March 20, 2025 and before 2031: https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/first-time-home-buyers-gst-hst-rebate/who-can-apply.html
Department of Finance Canada, Legislation to make life more affordable receives Royal Assent, March 12, 2026, Bill C-4: https://www.canada.ca/en/department-finance/news/2026/03/legislation-to-make-life-more-affordable-receives-royal-assent.html
Canada Mortgage and Housing Corporation, Rental Market Survey data tables, St. John's Census Metropolitan Area, Primary Rental Market, Rental Market Statistics Summary by Zone, reference period October 2025 (vacancy rate, average rent, median rent). This guide uses only clearly labelled illustrative rent figures, not figures from this table; check the latest release before relying on any rental figure: https://www03.cmhc-schl.gc.ca/hmip-pimh/en/TableMapChart/TableMatchingCriteria?GeographyType=MetropolitanMajorArea&GeographyId=1640&CategoryLevel1=Primary%20Rental%20Market&CategoryLevel2=Summary%20Statistics&RowField=25
Internal links used in this guide, all verified live at 200: /rental, /lease, /buy, /two-apartment, /home-value, /search, /contact.
Comments
Loading comments…