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For many tenants and particularly Millennials, this sounds like the million dollar question! How to afford a condo in Toronto?
Especially when as a renter you look at the new condos in Downtown Toronto being built! In every corner, more than Tim Horton’s, you can see construction sites!! You might have asked yourself, how can I afford to buy a condo in Toronto? Affording a house or a condo in Toronto depends on many things.
Overview of Toronto’s Condo Prices and Affordability:
Before COVID-19, Toronto’s real estate prices were outpacing many major cities. In the 2020 only the condo prices went up 18% year over year, from $622,000 to $722,675 in the beginning of March 2020. Which means Toronto Condo Affordability went under another 18% pressure since 2020. But now in the beginning of 2023 the old trend has changed and we see a decreasing trend in the average Toronto Condo prices. It could be good news for some of the first time home buyers who are looking to buy a Toronto condo. Also might be bad news for those investors or Toronto home buyers who have bought a Toronto property in the last months.
As a Toronto real estate agent, I analyze the market every month. The fact is that buying a Toronto condo has always been a profitable deal. Maybe we see a decreasing trend in these 2-3 months, but in the long term, this will definitely change and Prices could bounce back UP again!
View Toronto Real Estate Market for more details!
Condo affordability in Toronto depends on the neighbourhood, and certainly on your level of income.
In order to make it easy for you, I’ll put a table down below to compare the level of income with the neighbourhood.
Minimum Required Income to afford a condo in Toronto:
While purchasing a property, lenders look at your household income. Then they calculate the Total Debt Service, and Gross Debt Service for the family in order to approve them for the mortgage. So if you are a single person, or one of the family members is working, they consider that income only. Therefore couples who both are working can have a higher chance of getting their dream home in Toronto!
After calculating the income, the debt would be deducted in order for the bank to calculate the Debt Service. Debts that usually prevent people from getting approved for a higher amount of mortgage are Student Loans and Car loans! So if you can get rid of them, that would boost your affordability.
Especially car loans. The reason is that a car loan typically is a loan with an amortization of 4 to 7 years. Which means, let’s say for example the payment of a $40K car loan with amortization of 5 years, can prevent you from getting approved for a mortgage of approximate $100K (with 25 years amortization)! So I highly recommend you to consult with your mortgage broker and if possible for you, pay off some or all of your other debt before applying for a mortgage to be able to get approved for a higher amount! That way you can possibly boost your affordability level and can afford a better and or bigger condo in Toronto. By looking at the table below you’ll see that a $100K more in mortgage, can put you in a totally different neighbourhood in Toronto!
Down payment is another challenge, There are several ways that you can find money to put as a down payment for your condo, higher down payment will increase your Toronto home purchase’s affordability!
Related articles: Best condos in toronto
Toronto Condo Affordability by Neighbourhood:
As a Toronto real estate agent, I’ve worked with many condo buyers in Toronto.
For the purpose of the calculation in the below table, I’ve used 20% down payment! Also if you are a first-time home buyer you might be eligible for the Government’s Contribution plan! The Federal Government could contribute up to 10% to the price of the first home! That’s not for everyone and not for every property. Based on the limits that this program has, it’s for properties under $560K! And it’s up to 5% for resale properties ( existing condos in this case) and up to 10% for new constructions. For more details see Government’s website or talk to a Top Toronto Real Estate Agent!
* Stats have been provided by Toronto Real Estate Board and REALTOR.ca , numbers are for the beginning of February 2023.
| Neighbourhoods | Average Condo Price | MIN HOUSEHOLD INCOME | |
|---|---|---|---|
| Average Toronto Condo | Average Price in the city of Toronto | $711,171 | $105117 |
| E10 | Centennial Scarborough, West Hill, Highland Creek | $469,375 | $53709 |
| E11 | Malvern, Rouge | $530,631 | $58598 |
| W05 | Downsview- Roding - CFB, York University, Black Creek | $498,143 | $61230 |
| W10 | West Humber-Clairville, Jamestown, Rexdale | $525,643 | $64706 |
| E04 | Clairlea- Birchmount, Dorset Park, Kennedy Park, Wexford | $512,864 | $65065 |
| E08 | Cliffcrest, Eglinton West, Scarborough Village, Guildwood | $570,864 | $67498 |
| W09 | Kingsview Village, Martingrove, Humber Heights | $478,269 | $70320 |
| E07 | Agincourt North, Malvern West, Milliken | $610,583 | $70539 |
| E05 | L'Amoreaux, Steeles | $600,489 | $73059 |
| W07 | Stonegate- Queensway | $74196 | |
| E09 | Bendale, Morningside, Woburn | $535,126 | $74710 |
| E03 | East York, O'Connor-Parkview, Woodbine, Broadview North | $641,300 | $74978 |
| W04 | Weston, Mount Dennis, Brookhaven-Amesbury | $556,394 | $75344 |
| C13 | Banbudy- Don Mills, Parkwoods - Donalda, Victoria Village | $638,438 | $77588 |
| E06 | Birchcliffe- Cliffside, Oakridge | $727,000 | $79543 |
| C11 | Leaside, Flemingdon Park | $556,958 | $82076 |
| C06 | Bathurst Manor, Clanton Park | $634,600 | $88592 |
| W03 | Caledonia-Fairbank, Keelesdale-Eglinton West | $547,250 | $89455 |
| C15 | Bayview Village, Don Valley Village, Henry Farm, Hillcrest Village | $623,243 | $91788 |
| W06 | Alderwood, Long Branch, Mimico, New Toronto | $697,250 | $94421 |
| W08 | Islington-City Centre West, Kingsway South, Etonicock West Mall | $592,933 | $94563 |
| C07 | Willowdale West, Newtonbrook West, Lansing-Westgagte | $742,754 | $99170 |
| C14 | Newtonbrook East, Willowdale East | $769,850 | $99584 |
| C08 | Church-Yonge Corridor, St Lawrence Market, Cabbage Town- James town | $725,039 | $114070 |
| W01 | High park-Swansea , Roncesvalles, South Parkdale | $637,100 | $114649 |
| C10 | Mount Pleasant East, Mount Pleasant West | $751,341 | $115859 |
| E02 | East End- Danforth, The beaches, Woodbine Corridor | $694,000 | $116232 |
| C01 | Bay St Corridor, Niagara, C01 Waterfront Communities, Kensington, Trinity Bellwoods | $790,991 | $122261 |
| W02 | Dovercourt , Junction, High park North, Runnymede - Bloor West Village | $657,750 | $134899 |
| C04 | Bedfor Park, Forest Hill North, Lawrence Park North, Lawrence Park South | $944,125 | $137341 |
| C03 | Forest Hill South, Humewood, Oakwood, Yonge-Eglinton | $804,755 | $137914 |
| E01 | Blake-Jones, Greenwood-Coxwell, North Riverdale, South Riverdale | $711,714 | $143718 |
| C09 | Rosedale - Moore Park | $1,434,167 | $150479 |
| C12 | Bridle Path- Sunny Brook- York Mills, St Andrew-Windfields | $890,000 | $181640 |
| C02 | Annex, Casa Loma, Yonge-St. Clair | $1,350,722 | $201286 |
For many tenants and particularly Millennials, this sounds like the million dollar question! How to afford a condo in Toronto?
Especially when as a renter you look at the new condos in Downtown Toronto being built! In every corner, more than Tim Horton’s, you can see construction sites!! You might have asked yourself, how can I afford to buy a condo in Toronto? Affording a house or a condo in Toronto depends on many things.
Overview of Toronto’s Condo Prices and Affordability:
Before COVID-19, Toronto’s real estate prices were outpacing many major cities. In the 2020 only the condo prices went up 18% year over year, from $622,000 to $722,675 in the beginning of March 2020. Which means Toronto Condo Affordability went under another 18% pressure since 2020.
But now in the beginning of 2023 the old trend has changed and we see a decreasing trend in the average Toronto Condo prices. It could be good news for some of the first time home buyers who are looking to buy a Toronto condo. Also might be bad news for those investors or Toronto home buyers who have bought a Toronto property in the last months.
As a Toronto real estate agent, I analyze the market every month. The fact is that buying a Toronto condo has always been a profitable deal. Maybe we see a decreasing trend in these 2-3 months, but in the long term, this will definitely change and Prices could bounce back UP again!
View Toronto Real Estate Market for more details!
Condo affordability in Toronto depends on the neighbourhood, and certainly on your level of income.
In order to make it easy for you, I’ll put a table down below to compare the level of income with the neighbourhood.
Minimum Required Income to afford a condo in Toronto:
While purchasing a property, lenders look at your household income. Then they calculate the Total Debt Service, and Gross Debt Service for the family in order to approve them for the mortgage. So if you are a single person, or one of the family members is working, they consider that income only. Therefore couples who both are working can have a higher chance of getting their dream home in Toronto!
After calculating the income, the debt would be deducted in order for the bank to calculate the Debt Service. Debts that usually prevent people from getting approved for a higher amount of mortgage are Student Loans and Car loans! So if you can get rid of them, that would boost your affordability.
Especially car loans. The reason is that a car loan typically is a loan with an amortization of 4 to 7 years. Which means, let’s say for example the payment of a $40K car loan with amortization of 5 years, can prevent you from getting approved for a mortgage of approximate $100K (with 25 years amortization)! So I highly recommend you to consult with your mortgage broker and if possible for you, pay off some or all of your other debt before applying for a mortgage to be able to get approved for a higher amount! That way you can possibly boost your affordability level and can afford a better and or bigger condo in Toronto. By looking at the table below you’ll see that a $100K more in mortgage, can put you in a totally different neighbourhood in Toronto!
Down payment is another challenge, There are several ways that you can find money to put as a down payment for your condo, higher down payment will increase your Toronto home purchase’s affordability!
Related articles: Best condos in toronto
Toronto Condo Affordability by Neighbourhood:
As a Toronto real estate agent, I’ve worked with many condo buyers in Toronto.
For the purpose of the calculation in the below table, I’ve used 20% down payment! Also if you are a first-time home buyer you might be eligible for the Government’s Contribution plan! The Federal Government could contribute up to 10% to the price of the first home! That’s not for everyone and not for every property. Based on the limits that this program has, it’s for properties under $560K! And it’s up to 5% for resale properties ( existing condos in this case) and up to 10% for new constructions. For more details see Government’s website or talk to a Top Toronto Real Estate Agent!
* Stats have been provided by Toronto Real Estate Board and REALTOR.ca , numbers are for the beginning of March 2020.
For many tenants and particularly Millennials, this sounds like the million dollar question! How to afford a condo in Toronto?
Especially when as a renter you look at the new condos in Downtown Toronto being built! In every corner, more than Tim Horton’s, you can see construction sites!! You might have asked yourself, how can I afford to buy a condo in Toronto? Affording a house or a condo in Toronto depends on many things.
Overview of Toronto’s Condo Prices and Affordability:
Before COVID-19, Toronto’s real estate prices were outpacing many major cities. In the 2020 only the condo prices went up 18% year over year, from $622,000 to $722,675 in the beginning of March 2020. Which means Toronto Condo Affordability went under another 18% pressure since 2020.
But now in the beginning of 2023 the old trend has changed and we see a decreasing trend in the average Toronto Condo prices. It could be good news for some of the first time home buyers who are looking to buy a Toronto condo. Also might be bad news for those investors or Toronto home buyers who have bought a Toronto property in the last months.
As a Toronto real estate agent, I analyze the market every month. The fact is that buying a Toronto condo has always been a profitable deal. Maybe we see a decreasing trend in these 2-3 months, but in the long term, this will definitely change and Prices could bounce back UP again!
View Toronto Real Estate Market for more details!
Condo affordability in Toronto depends on the neighbourhood, and certainly on your level of income.
In order to make it easy for you, I’ll put a table down below to compare the level of income with the neighbourhood.
Minimum Required Income to afford a condo in Toronto:
While purchasing a property, lenders look at your household income. Then they calculate the Total Debt Service, and Gross Debt Service for the family in order to approve them for the mortgage. So if you are a single person, or one of the family members is working, they consider that income only. Therefore couples who both are working can have a higher chance of getting their dream home in Toronto!
After calculating the income, the debt would be deducted in order for the bank to calculate the Debt Service. Debts that usually prevent people from getting approved for a higher amount of mortgage are Student Loans and Car loans! So if you can get rid of them, that would boost your affordability.
Especially car loans. The reason is that a car loan typically is a loan with an amortization of 4 to 7 years. Which means, let’s say for example the payment of a $40K car loan with amortization of 5 years, can prevent you from getting approved for a mortgage of approximate $100K (with 25 years amortization)! So I highly recommend you to consult with your mortgage broker and if possible for you, pay off some or all of your other debt before applying for a mortgage to be able to get approved for a higher amount! That way you can possibly boost your affordability level and can afford a better and or bigger condo in Toronto. By looking at the table below you’ll see that a $100K more in mortgage, can put you in a totally different neighbourhood in Toronto!
Down payment is another challenge, There are several ways that you can find money to put as a down payment for your condo, higher down payment will increase your Toronto home purchase’s affordability!
Related articles: Best condos in toronto
Toronto Condo Affordability by Neighbourhood:
As a Toronto real estate agent, I’ve worked with many condo buyers in Toronto.
For the purpose of the calculation in the below table, I’ve used 20% down payment! Also if you are a first-time home buyer you might be eligible for the Government’s Contribution plan! The Federal Government could contribute up to 10% to the price of the first home! That’s not for everyone and not for every property. Based on the limits that this program has, it’s for properties under $560K! And it’s up to 5% for resale properties ( existing condos in this case) and up to 10% for new constructions. For more details see Government’s website or talk to a Top Toronto Real Estate Agent!
* Stats have been provided by Toronto Real Estate Board and REALTOR.ca , numbers are for the beginning of March 2020.
The Amount of Down Payment in Toronto
The housing market of Toronto has experienced dramatic changes and the number of people in the search for condos has increased tremendously.
In the case of buying a Toronto condo, you are required to pay a minimum down payment that is the amount of money a home buyer needs to pay at the time of buying a home and this amount will be deducted from the total price of your mortgage.
The mortgage loan will cover the remaining amount after deducting the down payment.
Case by case, the minimum down payment you require to pay is different. The purchase price of your desired condominium unit and its location are highly influential.
Being self-employed or having a poor credit score/history makes you pay a higher down payment for your Toronto condo. So, saving the minimum required down payment is recommended to reduce your debts.
It should be noticed that the down payment of your condo will determine the rate of interest for your monthly mortgage payment.
Ease Making Down Payments
You may have the eligibility criteria of Home Buyer’s Plan (HBP) which allows you to withdraw up to $ 25,000. This plan is tax-free and is withdrawn from the Registered Retirement Savings Plan (RRSP) of each individual. 15 years is given to the individual to repay what he has withdrawn.
But remember that timely repayments and its influence on your retirement savings should be considered before signing up for an HBP.
Before buying a Toronto condo, save for a little longer time as your saving means paying a lesser interest rate. You can have timely goals for saving and watch your account each month.
The next step after down payment is the turn of mortgage repayments that depends on mortgage rates. So, watch your spendings to be able to save more. The more you save in advance, it will be much easier to pay the mortgage rate.
In the case of having a credit card for paying down payment, repay your amount in full to avoid making debts. Credit cards have the advantage of purchase security but caution is needed when using them.