Canada’s Cheapest Cities to Buy a House| Most Affordable Cities in Canada
This video looks at every Canadian province and territory to identify the most affordable place to buy a home in Canada, along with where the most expensive cities to buy a house in Canada. This is a complete Canada home-buying guide to help you decide where to buy a house in Canada while showing you how much of your gross income will go towards covering your mortgage costs.
How I Determine the Most Affordable Cities in Canada
To determine which city was the most affordable, I assumed a couple would be buying a home in Canada. One would be a police officer (RCMP), and the other being a teacher. I used these professionals for two reasons. First, their salary information is publicly available; second; they play an important role in the development of society.
I assumed they would buy their home in the third year of their career as they would need some time to save up for their down payment. I used the constable wages for an RCMP officer in their third year, while I used the teacher’s information provided by Statistic Canada. With the teacher’s wages, I had to average out wages to come up with a third-year salary wage for each province. The salary for the RCMP officer was the same throughout Canada, but the teacher’s salary changed depending on the province, as what a teacher got paid would change depending on the province they were teaching in.
Mortgage Rates and Real Estate Prices Used
For the mortgage rate, I assumed it was 4.8% with a 25-year amortization. In Canada, insured mortgages have to be on a purchase price that’s less than $1M. However, I assumed regardless of the purchase price of the market, the couple would only put down 5% of the purchase price of their market, even though this would be more than $1M. This was done in an effort to try and keep this consistent regardless of the province they were buying in.
When it came to the home price, I used the purchase price information provided by The Canada Real Estate Association (CREA) for each province and city.
Most Affordable Cities in Canada
Saint John, New Brunswick, is the most affordable city to buy a home in Canada. If you buy a home here, 10.73% of your gross income will go towards covering your mortgage payment. The second most affordable city in Canada is St. John’s, Newfoundland and Labrador, with 12.27% of your gross income going towards covering your mortgage payment. And the third most affordable city in Canada is Winnipeg, Manitoba, with 12.63% of your gross income going towards covering your mortgage payment.
Most Expensive Cities to Buy a House in Canada
Greater Vancouver, British Columbia, is the most expensive place to buy a house in Canada. To afford a home in Greater Vancouver, you will spend 44.67% of your gross income to cover your mortgage payment. Greater Toronto is the second most unaffordable city, with 41.55% of your gross income needed to cover your mortgage payment.
Best Places to Buy a Home in Canada
Other worthwhile cities to consider buying a home in Canada from an affordability standpoint include Calgary, Saskatoon, Montreal, and Winnipeg. If you buy in these cities, the mortgage payment does not exceed more than 25% of the gross income used. The key with Canada regarding affordability is to know British Columbia and Ontario are the provinces that are by far the most unaffordable place to buy a home. In these provinces, you are looking at almost 50% of your gross income being needed to cover your mortgage payment. That doesn’t include other expenses such as property tax, insurance, heating, strata, etc.
Therefore, from an affordability standpoint, anywhere but Ontario and British Columbia will offer reasonable housing affordability.
Check out the video to get the remaining result for all provinces and territories in Canada.
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