How Long Until You Break Even on a Bungalow?

You break even on a house when the equity you’ve built covers every cost of buying and later selling it. That equity comes from paying down your mortgage plus any rise in the home’s value. With flat prices, it often takes several years; in a rising market, it can take much less.

What does “break even” mean when you own a home?

When you buy a bungalow, some of your money disappears into one-time costs. When you sell, more goes out the door. Breaking even means you walk away with at least as much as you put in, after those costs.

The formula is simple:

Breakeven when: mortgage principal paid + price change ≥ buying costs + selling costs

This ignores the fact that you’d pay for housing either way. If you’re comparing buying to renting, that’s a different question, covered below.

Step 1: Add up your buying costs

• Land transfer tax: on a $900,000 home outside Toronto, Ontario’s tax is $14,475. Inside Toronto, the municipal tax roughly doubles it.
• Legal fees and disbursements
• Title insurance, inspection and appraisal
• Mortgage default insurance, if you put down less than 20%. It’s added to your mortgage, but it’s still a cost.
• Moving costs

A common rule of thumb is that closing costs run 1.5% to 4% of the price. See our guide to Ontario land transfer tax for exact figures.

Step 2: Estimate your selling costs

• Real estate commission plus 13% HST: commission is negotiable. Every 1% on a $900,000 sale costs $10,170 with HST.
• Legal fees for the sale
• Mortgage penalty, if you break your term early
• Staging, repairs and moving

Learn more in our explainer on real estate commission in Ontario.

Step 3: Estimate your equity gains

Mortgage paydown

Every payment reduces your principal. Say you buy a $900,000 bungalow in Mississauga with 20% down and borrow $720,000 over 30 years at 4.5%. Your payment is about $3,630 a month. You’d pay down roughly:

After	Principal paid (approx.)
1 year	$11,700
3 years	$36,700
5 years	$64,100

A 25-year amortization builds equity faster, but with a higher payment.

Price change

Prices can rise or fall. As of August 2026, the GTA’s MLS HPI composite benchmark was down 4.5% from a year earlier, according to TRREB. Don’t assume growth when you plan.

Worked breakeven examples

Using the same $900,000 home, assume your total buying and selling costs add up to $60,000. This is only an illustration; your figures will differ.

Scenario	What happens	Approximate breakeven
Prices stay flat	Only mortgage paydown builds equity	Between 4 and 5 years
Price rises $20,000 a year	Paydown plus growth	About 2 years
Price drops 4.5% in year one, then holds	You first need to recover about $40,500	Well beyond 5 years

The lesson: the shorter your expected stay, the more a price dip or high transaction costs can hurt.

Buying vs renting: a different breakeven

To compare owning with renting, set the costs of owning that you don’t get back against the rent you’d otherwise pay. Those owning costs include mortgage interest, property tax, insurance, maintenance and the return your down payment could earn elsewhere. Add the one-time costs of buying and selling. Our post comparing renting vs buying a bungalow in the GTA walks through it.

How to reach breakeven sooner

• Buy right. Paying a fair price matters more than anything else.
• Reduce costs. Use first-time buyer land transfer refunds and compare legal and moving quotes.
• Add income. A legal basement unit can offset carrying costs.
• Pick a portable mortgage. If you might move early, portability can help you avoid a penalty.
• Use prepayment privileges. Extra payments build equity faster.

What if you need to sell before you break even?

Life happens. A new job, a growing family or a health change can force a move sooner than planned. You have a few options:

1. Rent the home out. If the rent covers most of your costs, you can wait for equity to build. Get advice on tax and insurance first.
2. Port your mortgage. Moving your mortgage to the next home can avoid a penalty, one of the biggest early-sale costs.
3. Price it right from day one. An overpriced listing that sits often sells for less in the end.
4. Negotiate selling costs. Commission, legal fees and moving quotes are all worth comparing.

Frequently asked questions

How long should I own a home before selling?

There’s no fixed rule. If prices are flat, it can take several years for mortgage paydown to cover buying and selling costs. Run your own numbers before you buy.

Does a 30-year amortization delay breakeven?

Yes, slightly. You pay less principal each month early on, so equity from paydown builds more slowly than with 25 years.

Are selling costs tax deductible on my home?

On a principal residence, the gain is usually tax-free, so costs generally aren’t deductible. On an investment property, they can reduce your taxable gain. Ask an accountant.

Does a renovation help me break even faster?

Only if it adds more value than it costs, which is never guaranteed. Repairs that protect the home and help it sell are usually safer bets than big cosmetic projects.

The bottom line

Your breakeven point depends on what you pay to get in and out, how fast you pay down your mortgage and what the market does. Plan to stay long enough that you’re not relying on price growth. Want a starting point? Get a free home evaluation to see where your current equity stands.