How much do I need to earn per year to afford a house in Canada?
Report of the National Bank of Canada, May 25, 2022.
Toronto's real estate market recorded its highest quarterly affordability deterioration since 1994 in the first quarter of 2022. Home prices rose, up 22.7% year over year and 7.2% during the quarter. Mortgage interest rates rose.
To buy a home in Toronto at an average price of $1,328,277 CAD, a family must earn at least $228,100 CAD per year. Otherwise the mortgage will not be approved.
If you buy a condominium — an apartment, townhouse or cottage, the area around which is common property of all tenants — at an average price of $720,929 CAD, the income of $144,644 CAD per year will suffice.
First installment
If you save 10% of your income per month, it would take you 363 months to save for a down payment to buy a house in Toronto. With a condominium, you have a chance of making it in 64 months.
You don't have to save up that long for a down payment; there are options where you pay less than 20% of the house price, such as just 6.67%. But then you'll pay at least $500 CAD extra every month because insurance is added.
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