Ontario is one of the few places in North America where renting a water heater, and increasingly a furnace or air conditioner, is normal. Millions of Ontario households pay a monthly rental fee on their gas bill or to a rental company for equipment in their basement. Renting is not a scam, and it suits some people, but it is usually the more expensive way to own heat and hot water. This guide sets out the numbers and what to check.
How rentals work
A rental company owns the equipment in your home and charges a monthly fee. The fee usually covers repairs and, for water heaters, replacement when the tank fails. Water heater rentals are often month to month. Furnace, air conditioner and heat pump rentals are usually long contracts, commonly 10 to 15 years, sometimes with yearly price increases built in and a buyout schedule if you end early. Some agreements register a notice on the property title, which shows up when you sell or refinance.
What renting costs over time
Water heater
A typical gas water heater rents for about $25 to $45 a month before tax. Over 12 years, the usual life of a tank, that is roughly $3,600 to $6,500. Buying the same tank installed costs about $2,000 to $3,500, and a repair or two over its life might add a few hundred dollars. For most households, buying is cheaper by a few thousand dollars over the life of the tank.
Furnace
A high-efficiency furnace might rent for $60 to $120 a month on a 10- to 15-year contract. Over 12 years that is roughly $8,600 to $17,000 or more with price increases, compared with $4,500 to $8,000 to buy one installed. The rental includes repairs, which have real value on a furnace, but rarely enough to close that gap. The new furnace cost guide has purchase prices in detail.
A worked example
Take a family in Stoney Creek with a 15-year-old rented gas water heater at $35 a month and a furnace that has just failed. A rental company offers a new furnace at $95 a month on a 15-year term, rising 3.5% a year. A local contractor quotes $6,200 to buy the same class of furnace installed. Over 15 years the rental payments add up to roughly $22,000. Buying, with a $150 tune-up each year and an allowance of $1,500 for repairs, comes to roughly $10,000. On the water heater, buying a $2,600 tank and returning the old rental ends a $420-a-year bill that has already paid for the tank several times over. The figures are illustrative, but the pattern is typical: over a full term, renting costs about double. Run the same sum with your own contract before deciding.
When renting can make sense
- You cannot cover the up-front cost and do not want to borrow, and the furnace has failed in January.
- You expect to sell within a year or two, and the rental can transfer to the buyer.
- You want no repair risk at all and value that predictability above the extra cost.
Financing a purchase through a contractor or a manufacturer program, or a line of credit, is often cheaper than renting even when cash is tight. Compare the total of all payments.
Read the agreement before you sign
- The monthly price, and whether and by how much it rises each year.
- The length of the term and what happens at the end: do you own it, keep paying, or return it?
- The buyout schedule if you end early or sell the house.
- What is covered: parts, labour, after-hours calls, and exclusions such as venting or ductwork.
- Whether a notice of security interest is registered on your property title.
- How to cancel, and what fees apply to removing the equipment.
Door-to-door sales are banned
Since March 1, 2018, Ontario has banned unsolicited door-to-door sales of furnaces, air conditioners, water heaters, water treatment devices and similar equipment. A business can only sign you up at home if you invited them for that purpose. If someone knocks claiming to be from "the gas company" or offering a free inspection of your water heater, close the door. Contracts signed in your home also carry a 10-day cooling-off period under the Consumer Protection Act.
Leaving a water heater rental
To switch from a rented tank to one you own, a contractor installs the new tank, and the old one goes back to the rental company. Rental companies have their own process for returns and may charge removal or return fees. Contact them before installation day, follow their instructions, and keep the confirmation. Some contractors handle the return for you. If the tank is old and you are on a month-to-month agreement, buying out is often unnecessary: you simply return it.
A tankless water heater or a combi boiler is a common reason people end a rental, and tankless vs tank helps decide.
Selling a house with rented equipment
Rental contracts normally transfer to the buyer with the house, but buyers and their lawyers increasingly ask for rentals to be paid out, especially long furnace contracts registered on title. If you are planning to sell, check your buyout amounts early.
Getting a purchase quote
If you want to compare, send one request for a purchase quote on a water heater or furnace. Put the purchase price next to the total of your rental payments over the same number of years.
Questions people ask
Is it better to rent or buy a hot water tank in Ontario?
For most households, buying is cheaper over the life of the tank by a few thousand dollars. Renting buys freedom from repair bills at a premium.
Can I return my rented water heater?
Usually yes, following the rental company’s return process. Check your agreement for removal or return fees before replacing it.
Can a rental company put a lien on my house?
Some agreements register a notice of security interest on the property title. It shows up when you sell or refinance. Ask before signing whether one will be registered.
Is door-to-door furnace sales legal in Ontario?
No. Unsolicited door-to-door sales of furnaces, air conditioners, water heaters and similar products have been banned since March 1, 2018.