Moving out for the first time, whether to a college town or a first apartment, is exciting and expensive. This lesson covers what renting really costs in Ontario, your rights as a tenant, and how people get from renting to owning if that's a goal.
How much rent fits?
A common guide is to keep rent to about 30% of your income before tax. On $4,000 a month, that's about $1,200. In much of Ontario, rents are higher than that for a one-bedroom, which is why so many people share with roommates at first.
Rent isn't the only monthly cost. There may also be utilities like hydro and heat, internet, a phone, transportation and tenant insurance, which many leases require. Tenant insurance covers your belongings and liability if, say, a leak from your unit damages the one below, and it's usually inexpensive.
The upfront costs
In Ontario, a landlord can ask for first and last month's rent before you move in, so a $1,200 apartment means $2,400 up front. A refundable key deposit is also allowed. Damage deposits aren't allowed under Ontario's rules for most rentals.
Add moving costs, some furniture, and kitchen basics, and the first month can easily cost two or three times the rent.
Your lease and your rights
Most residential leases in Ontario must use the province's Standard Lease form, which sets out the rent, what's included and the rules for both sides. Read it before signing, and keep a copy.
A few things worth knowing: rent increases for most units are limited to once a year, with written notice, and for many older units the size of the increase is capped by a provincial guideline. Landlords can't enter whenever they like; they generally need to give written notice. The Landlord and Tenant Board handles disputes.
Landlords often ask for a credit check and references. That's one more reason the habits in the credit card lesson pay off.
From renting to owning
Renting isn't a lesser choice than owning. It's flexible, and someone else fixes the furnace. But if owning a home is a goal, the first big step is the down payment.
On a $500,000 home, the minimum down payment is $25,000. Add something for closing costs, about 1.5%, or $7,500, and the target is around $32,500. Here's roughly how long it would take to save that in an account earning 3%, as estimates:
| Saving each month | Time to reach $32,500 |
|---|---|
| $300 | about 8 years |
| $500 | about 5 years |
| $800 | about 3 years 3 months |
Try it
How long to save a down payment?
The target is the minimum down payment plus about 1.5% for closing costs.
Target
$32,500
$25,000 down + closing
Time to get there
5 yr 1 mo
Interest earned along the way
$2,404
That's a long road, but it's a road. From age 18, a First Home Savings Account (FHSA) can help: contributions lower your income tax, and the money comes out tax-free for a first home. The adult lesson on buying a first home goes through all the costs.
Where to go next
Wherever you live, someone will eventually try to trick you out of your money. The last lesson is a game: can you spot the scam?
Worked figures are estimates based on the example inputs shown, checked October 11, 2026. Rates, rules and lender policies change, and your own numbers will differ. This is educational information, not financial advice.