Renting vs. Buying in London, Ontario (2026)

The most common reason people keep renting in London is not that they ran the numbers and renting won. It is that they never ran the numbers at all, usually because they assumed the down payment was out of reach. That assumption is worth testing before another lease renewal, because the gap between what people think they need and what is actually required is often large.

What You Actually Need to Buy

• A down payment starting at 5 percent of the first $500,000 of the purchase price, and 10 percent on the portion between $500,000 and $1.5 million.
• Mortgage default insurance if you put down less than 20 percent. This is normal, not a penalty, and it is what makes low down payments possible at all.
• Closing costs. Budget for land transfer tax, legal fees, title insurance, adjustments and a home inspection.
• Qualification under the mortgage stress test, which means proving you could carry payments at a rate higher than the one you are offered.
• Stable, documentable income. This is where self-employed buyers usually need the most lead time.

The Programs That Change the Maths

• The Ontario land transfer tax refund for first-time buyers, worth up to $4,000. In practice that means no provincial land transfer tax owing on the first $368,000 of a home's value.
• No additional municipal land transfer tax in London or St. Thomas. That second tax applies only in Toronto, which is why the same purchase price costs less to close here.
• The First Home Savings Account, which combines a deduction going in with tax-free growth and a tax-free withdrawal for a qualifying first home.
• The Home Buyers' Plan, which lets you withdraw from an RRSP toward a first home and repay it over time.
• Municipal down payment assistance in London-Middlesex and St. Thomas-Elgin, which runs on limited annual funding and operates first come, first served.

Stacked together, these change the required cash more than most renters expect. The programs are also the part people most often miss, because none of them are advertised at you the way a rental listing is.

The Real Comparison Is Not Rent Versus Mortgage Payment

Comparing your rent to a mortgage payment is the wrong comparison and usually the one that makes renting look better. A fair comparison puts the full cost of ownership on one side, including property tax, insurance, maintenance and condo fees where they apply, and puts rent plus the opportunity cost of your down payment sitting elsewhere on the other. Then it accounts for the fact that part of every mortgage payment is principal, which is money moving from one pocket to another rather than leaving.

When Renting Is the Right Answer

• You might relocate within two years. Purchase and sale costs need time to amortise.
• Your income is about to change in a way you cannot document yet.
• You are carrying consumer debt that would either sink your qualification or leave nothing for maintenance.
• You have no emergency fund. Owning without a cushion turns an ordinary repair into a crisis.

None of those are permanent conditions. Most are twelve to twenty-four month problems with a clear path through them, which is exactly why it is worth knowing where you stand now rather than guessing for another two years.

Frequently asked questions

How much do I need for a down payment in London, Ontario?

The minimum is 5 percent of the first $500,000 of the purchase price, and 10 percent on any portion between $500,000 and $1.5 million. Below 20 percent down you will need mortgage default insurance, which is added to the mortgage rather than paid up front.

Is it cheaper to rent or buy in London?

Month to month, renting is often cheaper. Over a longer horizon that usually reverses, because a mortgage payment builds equity and rent does not, and because ownership costs are largely fixed while rents move with the market. The break-even point depends on your purchase price, rate and how long you stay, which is a calculation worth doing with your actual numbers rather than a rule of thumb.

Can I buy a home in London with bad credit?

Sometimes, but it will cost you in rate and it narrows your lender options considerably. If your credit is the binding constraint, the highest-return use of the next twelve months is usually fixing that rather than saving faster, because a better rate compounds over the whole term.

What is the mortgage stress test?

It requires you to qualify at a rate higher than the one you are actually offered, so that a rate increase at renewal does not put you in trouble. It is the reason your approval amount is lower than a simple payment calculation suggests.

How long does it take to go from renting to owning?

For someone with a down payment already saved and clean credit, a few weeks to get pre-approved and start touring. For someone starting from zero, twelve to twenty-four months is a realistic runway. The first step is the same either way: find out precisely where you stand, so you are working on the right constraint.