What income and down-payment do you need in order to buy the average home in a major Canadian city?
The average detached house in Canada costs $503,301 and you’ll need a down-payment of $25,330 and a household income of at least $85,000 to buy it.
But the average isn’t representative of most Canadian cities.
The table below lists the minimum down-payments and approximate household income you need to afford the average detached house in Canada’s 25 largest cities:
About the numbers
I tried to find the average price for a detached home for each city, but when I couldn’t, I used the median house price instead. Please note that you will be able to find houses in your city that are priced higher and lower than the average/median prices listed in the table above. That’s how medians and averages work.
House prices are changing dramatically each month in some of the cities listed above, so the data in this table is probably out of date even as you’re reading it. I’m looking at you, Vancouver.
I used RateHub to calculate the monthly mortgage payments and estimate property taxes for each entry. I assumed a 25 year mortgage at an interest rate of 2.39%, and estimated monthly utility costs of $300. I used the property taxes estimates provided by RateHub. Your affordability may differ depending on the interest rate you secure, the property taxes in your city, and the costs of providing heat and power to your home.
I did NOT include things like land transfer taxes, realtor inspections, or home inspection fees, which vary by province and can add thousands of dollars to your initial purchase price.
Most people know the minimum down-payment must be at least 5% of the home’s value, but this is always true. For houses less than $500,000 in price, you need only a down-payment of 5%. For houses that cost more than $500,000, you have to put 5% down on the first $500,000 plus 10% of any amount above $500,000. For houses over $1 million, a 20% down-payment is required. You can read more about Canada’s down-payment rules here.
While I used the minimum down-payments in the table, I strongly discourage you from purchasing a home with less than 10% down. Ideally you want to put at least 20% down when you buy. I also strongly discourage you from purchasing a home at your max affordability based on your income. Too many young people rush into home ownership and end up with mortgage payments that prevent them from making progress with other financial goals, like saving for retirement. Strangling your cashflow just so you can become a homeowner will ruin your ability to save, and that leave you financially vulnerable, no matter how beautiful your granite countertops are.
Low house prices in a particular city do not mean you should buy a home because “it’s such a great deal”. High house prices in a particular city do not mean you should buy a home because otherwise “you might get priced out of the market”. What constitutes a good buying opportunity when it comes to Canadian real estate is complicated, and cannot be deduced from a single table.
Canada’s Most Expensive Cities
Vancouver, British Columbia
- Average house price: $1,513,800
- Down-payment required: $302,000
- Annual household income needed: $195,000
- Average house price: $1,280,000
- Down-payment required: $256,000
- Annual household income needed: $189,000
Victoria, British Columbia
- Average house price: $724,900
- Down-payment required: $47,490
- Annual household income needed: $111,500
Kelowna, British Columbia
- Average house price: $649,000
- Down-payment required: $39,900
- Annual household income needed: $101,500
Abbotsford, British Columbia
- Average house price: $599,900
- Down-payment required: $34,990
- Annual household income needed: $94,500
Hope you found this post interesting and useful!