The Rent or Buy Calculator compares what a rented water heater costs over its life, with the monthly fee rising each year, against buying one outright plus yearly maintenance. It shows the cumulative cost of each path year by year, the break-even year when renting has cost more than owning, and the saving over the life. It also reminds you to check your agreement's buyout schedule and cancellation terms before replacing a rented tank.
- Inputs: monthly rental fee, annual increase %, purchase and installation price, expected life, yearly maintenance if owned, years left on the rental contract.
- Rental cost compounds: each year's fee is last year's fee plus the increase, so the cumulative total bends upward.
- Owning costs the purchase price up front plus maintenance each year.
- Example: $35 a month rising 3.5% a year vs $2,600 to buy with $100 a year upkeep breaks even in year 8 and saves about $2,333 over 12 years.
- Before replacing a rented tank, read the buyout schedule and cancellation terms in your agreement.
Rent or Buy Calculator
01 /What does the Rent or Buy Calculator answer?
It answers whether renting a water heater costs you more or less than owning one, over the life of the heater, using your own numbers. Rental is common in parts of Canada, especially Ontario, where many homes came with a rented tank or where a rental was signed years ago and simply continued. The monthly fee looks small, but it runs for as long as the tank stays, and it usually rises. Buying costs more on day one and then very little each year.
The calculator puts both paths on the same timeline. It adds up rental payments year by year, adds up ownership costs year by year, and shows where the lines cross. It does not tell you what your agreement says about ending it early; that is why the contract caution appears with every result.
02 /What do you enter?
| Input | Where to find it | Notes |
|---|---|---|
| Monthly rental fee | Your gas or utility bill, or the rental provider's statement | Use the fee before tax |
| Annual increase % | Your agreement or past bills | Compare this year's fee with last year's if unsure |
| Purchase + installation price | Written quotes | Include permit, expansion tank, venting and haul-away if quoted |
| Expected life (years) | The Tank Lifespan Predictor | The comparison runs over this many years |
| Annual maintenance if owned | Your estimate | Flushing, anode checks, and an allowance for repairs |
| Years remaining on the rental contract | Your agreement | Used for buyout awareness |
Get the purchase figure from real written quotes rather than guessing. The replacement cost guide gives planning ranges by type, but the installed price for your house depends on venting, gas line, access and code upgrades. For maintenance, include an allowance for repairs a rental would normally cover, such as a thermostat, igniter or element, not only routine flushing.
03 /How does the calculator work?
Rental, year by year. Year 1 costs 12 × the monthly fee. Each following year, the monthly fee rises by the annual increase, so year 2 costs 12 × fee × (1 + increase), year 3 costs 12 × fee × (1 + increase)², and so on. The cumulative rental cost is the running total.
Owning, year by year. The cumulative owned cost is the purchase and installation price plus the annual maintenance multiplied by the number of years so far.
Break-even year. The first year in which cumulative rental cost reaches or passes cumulative owned cost. After that year, every further year of renting widens the gap.
Saving over the life. Cumulative rental cost minus cumulative owned cost at the end of the expected life. A positive number means owning saves money over the life; a negative number means renting costs less on your inputs.
04 /Worked example: a standard gas tank
Inputs: $35 a month, rising 3.5% a year; buying costs $2,600 installed; expected life 12 years; ownership maintenance $100 a year.
| Year | Rental (cumulative) | Owned (cumulative) | Cheaper so far |
|---|---|---|---|
| 1 | $420 | $2,700 | Rent |
| 2 | $855 | $2,800 | Rent |
| 4 | $1,770 | $3,000 | Rent |
| 6 | $2,751 | $3,200 | Rent |
| 7 | $3,267 | $3,300 | Rent (just) |
| 8 | $3,802 | $3,400 | Own: break-even year |
| 10 | $4,927 | $3,600 | Own |
| 12 | $6,133 | $3,800 | Own |
Renting is cheaper for the first seven years, because the purchase price is paid up front. In year 8 cumulative rent passes the cost of owning, and by year 12 renting has cost about $2,333 more than buying and maintaining the same heater. Notice the rental column accelerating: the year 12 payments alone total about $613, against $420 in year 1.
05 /Two more examples: when owning loses, and when it wins narrowly
A pricier heater against a low fee. Inputs: $28 a month rising 2%; a heat pump water heater costing $5,500 installed; 13-year life; $80 a year maintenance. Cumulative rent reaches about $4,933 by year 13, while owning costs $6,540. There is no break-even year within the life, and owning costs about $1,607 more on these inputs. Incentives, lower running costs or a longer life could change that, which is why this comparison should be read with the Energy Cost Comparer.
A higher fee against a mid-priced heater. Inputs: $45 a month rising 4%; $4,200 to buy a power-vent tank installed; 10-year life; $150 a year maintenance. Rent passes ownership in year 9 ($5,715 against $5,550), and owning saves about $783 over ten years. A narrow margin like this is sensitive to the life you assume: if the tank lasted 12 years, the saving would grow; if it failed at 8, renting would have been cheaper.
06 /Before you replace a rented tank: the contract caution
That is why the calculator asks for the years remaining on your contract: with several years left, a buyout or cancellation charge can be a real cost to add to the owning side. Ask the rental provider in writing for the current buyout amount, any removal or return charge, and whether you must return the old tank or can have your installer dispose of it. Read the agreement for how to cancel and to whom notice must go. How to cancel or buy out a rented water heater covers each exit step, from the buyout quote to returning the tank.
In Ontario, provincial consumer rules add some protections. Water heaters are among the products that cannot be sold or offered at your door unless you initiated the contact, and contracts signed in your home carry a 10-day cooling-off period that starts when you receive the written agreement. Ontario's Homeowner Protection Act, law since June 6, 2024, bans registering notices of security interest (NOSIs) on title for consumer goods such as water heaters and deems existing consumer NOSIs expired. The province warns homeowners to beware of companies charging fees to remove them. The Across Canada page and rental vs buy guide go further.
07 /What the calculator leaves out
- Repair risk. A rental usually includes repairs and replacement of the rented unit; owning puts that risk on you. Put a repair allowance in the maintenance input rather than only flushing.
- Running costs. Rent and own compare the heater, not the energy. Choosing a more efficient heater when you buy can lower energy bills as well.
- Money today vs later. The calculator adds dollars without discounting them. If you would finance the purchase, add the interest to the purchase price.
- Contract terms. Buyout schedules, removal fees and notice periods are specific to your agreement and are not modelled.
- Incentives. Program rebates for high-efficiency heaters change the purchase price; check the rebates guide.
When the numbers favour buying, collect quotes using the installation guide as a checklist, and you can request quotes through HAUSE Home. HotWaterTank.ca is independent: it does not rent, sell or install water heaters, and does not name or rank providers.
FAQQuestions people ask
Is it worth renting a hot water tank?
Renting spreads the cost and usually covers repairs, but the fees continue as long as the tank stays and often rise each year. With the example inputs, owning breaks even in year 8 and saves about $2,333 over 12 years. Run your own numbers.
How does hot water tank rental work?
A provider installs and owns the tank and charges a monthly fee, billed by the rental company or, where a utility rents tanks, on the utility bill. The agreement sets repairs, fee increases, buyout pricing and how to end it.
How do I cancel a hot water tank rental?
Read your agreement for the notice process, buyout schedule and removal or return fees, then contact the rental provider in writing. Confirm the buyout amount before booking a replacement.
Can a rental company put a lien on my house in Ontario?
Ontario's Homeowner Protection Act, in force since June 6, 2024, bans registering notices of security interest for consumer goods such as water heaters and deems existing consumer NOSIs expired.
What does the break-even year mean?
It is the first year in which total rental payments reach or pass the total cost of buying and maintaining a heater. Every year of renting after it adds to the cost of renting.