Ontario has more rented water heaters than any other province. Here’s the 2026 economics breakdown and technology comparison.
The rental trap:
$20-$40/month rental = $3,600-$9,600 over 15-20 years, for an appliance costing $800-$2,500 to own. Buyout fee when selling: $1,500-$3,000 (often required to close). Read your rental agreement terms before any changes.
Technology comparison:
Gas tank (40-50 gallon):
Most cost-effective for most Ontario homes. UEF 0.67-0.70. Lifespan 10-15 years.
Supply and install (owned, including rental removal): $1,200-$2,200.
Gas tankless (condensing):
Unlimited hot water, no standby loss. UEF 0.90+.
Requires 3/4" gas line and dedicated flue.
Supply and install: $2,500-$5,000.
Note: cold water sandwich effect is real – brief cold burst between consecutive draws.
Heat pump water heater (electric):
2-3x efficiency of conventional electric. Best in conditioned spaces that are air-conditioned (HPWH cools the space as it heats water).
Not suitable for small unventilated mechanical rooms.
Canada Greener Homes Grant: up to $1,000 rebate.
Supply and install: $1,800-$3,500.
What water heater do you have? Has anyone bought out their rental unit recently – was the buyout worth it?
Water heater and HVAC questions at home.renovation.reviews