How this calculator works
A rent increase compounds: each year the new rent becomes the base for the next increase, so a modest rate repeated over many years adds up quickly. This calculator projects that growth, or works backwards to recover the rate, the number of years or the starting rent behind a future figure. Choose whether you are entering monthly or annual rent and the answer is shown in the same period. The rent paid over the period is the running total of every month, not just the final year, assuming the increase lands at each anniversary. In Canada, many provinces cap rent increases for existing tenancies. Ontario, for example, publishes an annual guideline that landlords may not exceed without approval from the Landlord and Tenant Board, and the cap does not apply to buildings first occupied after 15 November 2018. Other provinces have their own rules, and no province caps the rent on a newly vacant unit in the same way. A guideline is a ceiling on the increase for a sitting tenant, not a prediction of market rent.
Formula
Future rent = current rent x (1 + rate)^years. Annual rate = (future / current)^(1 / years) - 1. Years = ln(future / current) / ln(1 + rate). Current rent = future / (1 + rate)^years. Total paid = 12 x current monthly rent x ((1 + rate)^years - 1) / rate, with 12 x current x years when the rate is zero.
Worked example
A rent of $2,000 a month rising 2.5% a year for five years becomes $2,000 x 1.025^5 = $2,262.82 a month. The total increase is $262.82 a month. Over the five years the tenant pays about $126,152 in rent, because each year is charged at that year's rent. At 3.5% instead, the same starting rent reaches $2,375.37 after five years.
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Frequently asked questions
Does the rent increase compound every year?
Yes when the rate is a percentage of the rent at the time of the increase. Each increase is applied to the rent already in force, so the percentage applies to a larger base each year.
Is this the same as a provincial guideline?
No. A provincial guideline is a legal maximum for a sitting tenant in a covered unit. This calculator shows the arithmetic of a chosen rate; check your province's current guideline and whether your unit is covered before relying on a number.
How do I compare a monthly and an annual figure?
Multiply the monthly rent by twelve to get the annual rent. The percentage increase is the same either way, because the period cancels out in the ratio.
Can the increase be negative?
Rent can fall, and the calculator accepts a rate down to -100%, but a negative rate is unusual for an existing tenancy. If the future rent is below the current rent, expect a negative increase in the results.