Tired of renting and want to buy a home in Toronto? How much do you have to make it happen?
The answer, according to veteran mortgage broker James Laird, is a lot — even assuming you have enough for a down payment well into the six figures.
With the average price of a home in the Greater Toronto Area now well over $1 million, Laird says lenders need a $205,400 household income to buy the average home. And that’s if you’ve already saved $231,000 toward a 20 percent down payment — the minimum required for a home over $1 million.
While tightened mortgage regulations may have added a bit to the level of income lenders need to face, the red-hot real estate market is having a much bigger impact, Laird said.
“Home prices are definitely the much bigger factor,” said Laird, president of CanWise Financial, and co-founder of the rate-viewing site. ratehub.ca
In October, the average price of a home in the GTA reached $1,155,345, up 19.3 percent from a year earlier. At last year’s average price of $970,878, Laird said lenders needed a household income of $172,600, assuming a 20 percent down payment.
The buyers of those average homes are typically couples, Laird said. And more often they need financial help from relatives for the down payment.
“A lot more people need help from mom and dad,” Laird says