Thinking about owning a home in Canada? It was only a few years ago that Toronto and Montreal were ranked among the best places to live with the cost of living as a contributing factor.
But the cost of ownership has now skyrocketed. In cities like Vancouver, Toronto and Montreal, only those in the highest income brackets can afford to live there. But there’s hope for potential homeowners. Widening your search can help you find affordable housing.
We used the RATESDOTCA mortgage affordability calculator to determine the household income brackets needed to own homes in each major city.
Cost of Owning a Home in Major Cities
A Zoocasa study found that Toronto’s benchmark house price is $873,100. Only those with income in the top 10% are able to afford homes there. Vancouver’s benchmark house price is $1,441,000 and only those in the top 1% can afford a home there.
The lowest mortgage rate on RATESDOTCA is 2.75% but we used an average figure of 3.25% to reflect the majority of Canadian’s experience. We also used:
- Debts: $10,000
- Monthly Vehicle Lease Payment: $300
- Down payment: 20%
- Amortization: 25 years
- Mortgage Type: Five-year fixed
- Rate: 3.25%
From there, we plugged in Gross Household Income in $10,000 increments until we could afford the benchmark house price in each city.
Income Requirements and Benchmark Home Prices by City:
For example in Vancouver the benchmark house price is $1,441,000. Using the figures above, your household income would need to be over $240,000 a year to afford to buy this house.
- Vancouver: House price: $1,441,000. Household Income needed: $240,000
- Toronto: House price: $873,100. Household Income needed: $160,000
- Victoria: House price: $741,000. Household Income needed: $140,000
- Hamilton: House price: $630,000. Household Income needed: $120,000
- Kitchener-Waterloo: House price: $523,720. Household Income needed: $110,000
- Calgary: House price: $467,600. Household Income needed: $100,000.
- Ottawa-Gatineau: House price: $444,500. Household Income needed: $90,000
- London: House price: $426,236. Household Income needed: $90,000
- Montreal: House price: $375,000. Household Income needed: $80,000
- Edmonton: House price: $372,100. Household Income needed: $80,000
- Saskatoon: House price: $301,900. Household Income needed: $70,000
- Regina: House price: $275,900. Household Income needed: $70,000
Only the Top 25% of Canadians Can Purchase Apartments and Starter Homes in Vancouver and Toronto
Interested in buying an apartment? It’s not only single-family homes that are not affordable. Starter homes are also reaching unrealistic prices in urban areas.
Only income earners in the top 25% bracket can afford apartments in Vancouver. The benchmark unit price there is $656,900.
In Toronto, it's $522,300. The 2016 Census lists the following household income percentiles. To buy a house, you’d need to be in the percentile group with the minimum household income for your city.
For example in Toronto, a household income of $160,000 would put you just inside the 95th percentile, meaning you’re in the top 5% of Canadians.
Household Income by percentile*:
- 25th Percentile: $45,000
- 50th Percentile: $90,000
- 75th Percentile: $100,000
- 90th Percentile: $150,000
- 95th Percentile: $199,000
- 99th Percentile: $200,000 and over
*Approximate values based on cleaned 2016 Total Household Income data from Canadian Census.
Determining Monthly Mortgage Costs with a Mortgage Affordability Calculator
The figures above are a rough guide only. To find out exactly how much you can afford in your city, you can put your own information into our convenient mortgage affordability calculator.
That way you'll also know how much house you can afford to assist in your housing search.
Looking for the best mortgage rates?
Don’t let skyrocketing home prices stop you from your housing search. With so many areas in Canada that offer affordable housing, widening your search can give you more options.
With RATESDOTCA, you can compare mortgage rates from the best lenders. Compare mortgage rates today!