What salary do you need to buy a house in Toronto?
Toronto in the southeastern of Canada is one of the most popular cities in the world. Toronto is also known as a multicultural city, because of its wide range of cultures, languages, foods and arts and immigrants are almost half of its population. Toronto is financial capital of the Canada, which has made it to attract more investors.
Cost of living in Toronto is high and home prices have increased in recent years. Buying a house is one of the most important costs in life, so, what salary do you need to buy a house in Toronto?
Buying a house in Toronto
Toronto is the most populated city in Canada and market of real estate and price of houses has been constantly increased, so that buying a house in Toronto is considered as a profitable investment. Suburbs such as North York, Richmond Hill or Halton region are the best places to live in Toronto for families. Young men and women can live in downtowns. People choose the living areas based on the criteria such as: low crime rate, good schools, good access to the downtown and their budgets.
Tips on buying a house in Toronto
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Pay taxes
You should pay taxes for buying a house in Toronto such as other cities in Canada, which includes taxes of house ownership and house transfer.
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Have a financial plan
Toronto’s real estate market has its fluctuations, so it’s better for you to save your money.
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Find a real estate agent
Finding the real estate agent is key. The agent can guide you through end-to-end process and be able to show you houses before they hit the wider market.
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Get pre-approved for a mortgage
If you can’t buy a house outright with cash, you can get a mortgage loan. Getting pre-approved loan shows you are a real buyer and can get offers on properties.
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Attention to the insurance and its costs
You need to insure your house against the accidents. In addition, if you want to get a mortgage loan you should pay insurance fee.
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Get home inspection
You should inspect the house you have bought and this is the buyer’s right. This stage highlights any costly repairs and damages and if you find any problem, you can pull out of the contract.
Salary needed to buy a house in Toronto
You will need to have more than 220,000$ income to buy a house in Toronto with a 20 per cent down payment. Your salary needed depends on the house you buy. The detached homes (single-family houses) are less expensive than attached homes and also you may have less profit when selling them.
Salary needed is calculated through 2 parameters: GDS (Gross Debate Service) and TDS (Total Debt Service). GDS is calculated by all taxes, utilities and mortgage payments and determines how much of your income is going toward housing costs. TDS measures how much of your grass income is being used to cover your housing costs and other debt payments and most mortgage lenders let you to have a TDS ration up to 44%. Keep in mind that if you currently have a lot of debt, the number will be changed.
Salary needed to buy a house based on the areas
5 high price areas in Toronto
- Average price: 1,403,162$- salary needed: 209,957$
- Average price: 1,074,250$- salary needed: 165,088$
- Richmond Hill. Average price: 1,033,745$- salary needed: 159,567$
- Average price: 974,626$- salary needed: 151,501$
- Central Toronto. Average price: 966,088$- salary needed: 150,337$
5 affordable price areas in Toronto
- Average price: 515,261$- salary needed: 88,840$
- Average price: 523,418$- salary needed: 89,953$
- Average price: 532,908$- salary needed: 91,247$
- Average price: 6560,735$- salary needed: 95,043$
- Average price: 582,455$- salary needed: 98,006$
Studies have been shown that, a family of four need at least 100000$ income to buy a house.
Why does it cost so much?
The government has imposed restrict regulations for building apartments in the city, so the number of people in Toronto is more than the houses and resulted in rising house prices. If this law is changed and more houses are built, can be expected that houses price will be decreased. If you want to buy a house in Toronto, it’s better to consult with ad real estate agent to get accurate information and choose a comfortable house.