Canada ranked among the 'most affordable' countries in the world and the US is way behind

If you're keeping an eye on the best countries to live in — especially if you're thinking about cost of living — there's some good news for Canadians.

According to a new global ranking from Compare the Market, Canada lands solidly among the most affordable countries in the world. Even more surprising? It beat the United States, which didn't even crack the global top 10.

The Cost-Effective Countries Index 2025, released Thursday, examined the affordability in 44 comparable countries from around the globe to figure out where people can live well without breaking the bank.

It crunched numbers in five major categories — income and taxes, housing, utilities, transport, and essentials like groceries and leisure — and gave each country a final score out of 100. The higher the score, the more affordable life is in that country.

Canada came in at No. 8 overall with a solid score of 62.74. Compare the Market says that a strong average after-tax income of $30,489, paired with manageable mortgage rates and gas prices, helped push Canada into the top tier of the best countries in the world.

Weekly grocery bills are still on the high side at $102.91 on average, but overall, the cost of living in Canada stacks up pretty well compared to many other parts of the world.

Meanwhile, the United States trailed behind in 11th place, with a score of just 59.67. Despite a higher average post-tax income of $35,050, Americans face steeper mortgage interest rates and higher weekly grocery costs — averaging $113.37 — making everyday life less affordable overall.

At the other end of the spectrum, most other countries known for having higher incomes are also among the priciest. Iceland, Portugal, Switzerland and Denmark ranked as the least affordable places to live, with high salaries that aren't enough to offset steep taxes, soaring housing costs and everyday expenses.

Portugal is especially tough for homebuyers, with one of the highest housing price indices on the list. Turkey also scored poorly in that area, with mortgage interest rates pushing an eye-watering 40%. Even fun costs more in these countries — Switzerland topped the leisure category, with average spending hitting $319.40, while Iceland and Denmark weren't far behind.

These are the 10 most affordable countries to live in and their respective index scores, according to Compare the Market:

1. Brazil — 71.27
2. Romania — 70.18
3. Indonesia — 68.78
4. India — 67.40
5. South Korea — 66.89
6. Bulgaria — 65.99
7. Luxembourg — 63.86
8. Canada — 62.74
9. China — 62.60
10. Colombia — 61.23

While many of the top-ranking countries are known for low incomes, they also tend to have extremely low costs in housing, transportation and daily essentials — making them ideal for digital nomads and retirees looking to stretch their dollars.

Compare the Market notes that countries like Brazil and Indonesia offer affordable accommodation and transport costs alongside cheap groceries and public transport, while European picks like Romania and Bulgaria mix modest wages with low utility and rent prices.

As for Canada, it stands out as the only North American country to make the top 10 — a solid reminder that even with higher grocery prices and taxes, we're still getting decent value for what we earn.

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