Million Dollar Mortgages

[Not getting younger]

My apologies. One other factor that is likely playing a big role, but is rarely discussed by media, or politicians. And it directly affects both demand side dynamics and generaational wealth. And my better half absolutely sees this.

divorce.
About half her transactions are people splitting up. So one house to be sold, two required weather purchase/rent. There’s been a few would be buyers that despite having ok equity ( post divorce) and pretty good savings ( I’m talking 6 figures) and ok jobs/incomes. Find it hard to qualify…Main point being, divorce rates are high. Adding to demand side…

generational wealth.
Nothing like having good net worth as a couple. Then seeing it seriously kneecapped.

 

[NotADcotor]

I don’t get the math or the logic. As a kid watching “lifestyles of the rich and famous “ a million dollar house meant 3+car garage, tennis court, olympic size swimming pool and helicopter pad.
I just saw a listing for a new 1 bedroom 1 bathroom condo downtown for 750,000 plus 30,000 for the parking spot.

Jeez 35 years ago you could buy a house for a million dollars, OTOH a million dollars would also get a tree fort and maybe a small fridge. A Llama or an Emu but I assume not both. John Merrick's remains although why? A K-Car. A monkey, a Green sweater but not a real one or a Picasso.

Fuck man, everything cost a million dollars back in the day

Yes I know the lyrics does not imply you can only buy one item, thank you but I prefer it my way.

 

[sprite09]

I was surfing Realtor to see houses I may want to buy one day. Seeing price tags of around 1.5M. Assuming a couple bring 500k to the table, which is a decent down payment and borrowed a million bucks (yikes), the monthly payment comes out to $6500. Who's paying 6500 a month in mortgage??? That's without other expenses. I wasn't looking in rich areas even where you'd expect wealthy people to put a giant sum as down payment (well over 20%).

How does the math work out ?

there are many people who bring in like 6k a month...spouse might bring in 4k or a bit higher , so it's not unfathomable

and ofc there are those rich foreigners (eg chinese and Persians) who buy these houses with parents' money (I know a few myself )

 

[Not getting younger]

$120,000-150,000 duo income. Might describe what we call middle class to upper middle class. So pretty realistic. Again, keep in mind the median duo income is around $85,000. Coles notes. 50% of the population household income bring home less than that.

I sometimes wonder where/how people’s perceptions with respect to income get so skewed. In the US millionaires think they are middle class…….. Anyone that grossed over $100,000 is in Canadas top 10%. Which means 90% of the population…….

What is the Top 10% Income in Canada?

Learn about the top 10 percent income in Canada and how much they earn, including what jobs they have and where they live.

www.savvynewcanadians.com

.

If your mortgage is eating 60% of your income (6k of 10k) you will have a hard time with lenders. Aka not going to happen. . There are numerous test that help determine affordability. Including gross debt and net debt. Which considers a persons ability to carry their mortgage, their credit cards, their lines of credit, cars loans, their land taxes, their Heating cost.

Debt-Service-Calculator

Compare your monthly debt payments and housing expenses to your gross household income.

www.cmhc-schl.gc.ca

.

speaking of car loans. If your debt and credit profile ain’t so good. Especially younger people, you will get raped on the interest rate.
most homeowners I think need cars……..

I cannot stress this enough. Whether you (a reader) are young yourself, thinking about marriage, nuclear families, white picket fences. Or if you are now a parent with young children or teens, or a twenty something child living in the basement.

start working on your credit resume. Learn how to improve it. What helps, what doesn’t. Not many years ago landlords wouldn’t look at them. A pay stub and references were good enough.

those days are toast.

 

[dirtyharry555]

Vancouver And Toronto Are Never Going To Be “Affordable,” So Now What?

Instead of asking when will Vancouver or Toronto housing become affordable, it's time to ask if we should accept high prices as a new normal.

storeys.com

 

[Not getting younger]

Good read.
There was/is a thread in the lounge discussing the rental market which is as bad, and arguably worse than the ownership market. And is why I cannot stress enough that “young” people start worrying about their credit resumes.

There was a great article about two weeks ago comparing San Fran and the GTA. In San Fran, today, it’s basically the wealthy and the poor. If I was going to bet on things, that’s where I’d place my money…

Also not touched on yet is the gentrification of outlying areas. Some think it’s a good thing, others not. Given Ontarios geography and economy, me I tend to think it’s more bad than good.

 

[TomFord1980]

Growing up in Mississauga, the mansions were located in the Mississauga Road

At the time, you were rich if you lived there.

However, ‘average families’ started buying properties in this area? How? Many were South Asian, and you had multiple generations, and siblings sharing a mortgage.

Today, I know many of these million dollar mortgages have more than 2 incomes paying them.

For example, one of my staffers has 8 people living in their 2400 square foot house with a finished basement apartment. There are 6 adults paying the mortgage.

This is another reason why immigration is a good thing as this is becoming a trend. it drives up equity in the home for existing home owners since multiple generational families living in one house is feasible and ideal for them. It's just too bad that our younger generation may not own a home until their parents pass away and hand it down.

 

[Not getting younger]

This is another reason why immigration is a good thing as this is becoming a trend. it drives up equity in the home for existing home owners since multiple generational families living in one house is feasible and ideal for them. It's just too bad that our younger generation may not own a home until their parents pass away and hand it down.

An awful lot can change in 20-30years. About the time people retiring today should plan for.

I wouldn’t bet on getting your/my/their parents houses. Lol, just think about all the moaning over inflation. Land taxes, and people not having enough saved.

with respect to multi generational. Very true, also very true western society uncomfortable with it. Also means what ever equity there is, is being split, 6,8,10 ways.

Reverse mortgages are booming amid Canada’s turbulent rate environment - Mortgage Rates & Mortgage Broker News in Canada

High rates haven't stopped Canadians from tapping their home equity by way of reverse mortgages.

www.canadianmortgagetrends.com

 

[DiscreetRocker]

There's a guy on TikTok or something that posts "Canada or Castle" videos. He shows a real estate listing in Canada, usually something awful, and then shows a literal castle for sale in Europe that's the same price. It's nuts.

 

[New World]

I have been renting for the past five years. I am a bachelor with no dependants. I earn on average $225k a year. I was looking at a condo $900k in Etobicoke. I am a first time buyer and can put 100k down. My mortgage payment would be $5200 per month. It's completely unaffordable even for someone in the top 2% of earners..

 

[oreocook11]

I have been renting for the past five years. I am a bachelor with no dependants. I earn on average $225k a year. I was looking at a condo $900k in Etobicoke. I am a first time buyer and can put 100k down. My mortgage payment would be $5200 per month. It's completely unaffordable even for someone in the top 2% of earners..

You're a bachelor/no-dependants earning 225k a year and have only 100k saved up ? Someone that makes 225k is usually looking in the 1.5 to 2M range. I know people that buy 900k condos with 160k total salary, and get pre approved with a breeze...

 

[New World]

You're a bachelor/no-dependants earning 225k a year and have only 100k saved up ? Someone that makes 225k is usually looking in the 1.5 to 2M range. I know people that buy 900k condos with 160k total salary, and get pre approved with a breeze...

Well let's use 160k earning a year. That's roughly 8500 per month take home... Including deductions for EI, CPP disability ins. Rrsp contributions etc.

Based on today's rate with $200k down payment and $1.3m mortgage that translates to approx $8.3k mortgage payment per month.

How do you pay for. Car insurance phone bill cable, food, internet,hydro, vacation fund, savings, entertainment etc?

 

[oreocook11]

Well let's use 160k earning a year. That's roughly 8500 per month take home... Including deductions for EI, CPP disability ins. Rrsp contributions etc.

Based on today's rate with $200k down payment and $1.3m mortgage that translates to approx $8.3k mortgage payment per month.

How do you pay for. Car insurance phone bill cable, food, internet,hydro, vacation fund, savings, entertainment etc?

I'm guessing people buying $1.5M homes have a larger down payment because they are high income earners like yourself (and have enough saved up enough - 20% is the bare minimum). Or they rolled up equity from a previously owned property-moving up the property ladder. Even on the 900k condo you quoted, the minimum you'd need to qualify from a bank would be $180k down. Unsure how you ended up with just $100k on a 225k salary, working 5years, which probably isn't top 2%, more like top 0.5% I'd guess.

 

[Caspertheghost]

Well let's use 160k earning a year. That's roughly 8500 per month take home... Including deductions for EI, CPP disability ins. Rrsp contributions etc.

Based on today's rate with $200k down payment and $1.3m mortgage that translates to approx $8.3k mortgage payment per month.

How do you pay for. Car insurance phone bill cable, food, internet,hydro, vacation fund, savings, entertainment etc?

Don’t forget tons set aside for the hobbying!

 

[New World]

I'm guessing people buying $1.5M homes have a larger down payment because they are high income earners like yourself (and have enough saved up enough - 20% is the bare minimum). Or they rolled up equity from a previously owned property-moving up the property ladder. Even on the 900k condo you quoted, the minimum you'd need to qualify from a bank would be $180k down. Unsure how you ended up with just $100k on a 225k salary, working 5years, which probably isn't top 2%, more like top 0.5% I'd guess.

I'm am 42 years old. I don't have a house that I currently live in to sell. it makes sense that as a first time buyer I cant afford a $ 1.3m mortgage.. so yes your probably correct that people who are considering a $1.5m are already in the market. It's only in the last couple years I have broken the $200+k barrier..

If you look at data from statscan it show the top 1% of earners in Canada earn $254k per year. Obviously the top 1% in Toronto is higher..

 

[oreocook11]

I'm am 42 years old. I don't have a house that I currently live in to sell. it makes sense that as a first time buyer I cant afford a $ 1.3m mortgage.. so yes your probably correct that people who are considering a $1.5m are already in the market. It's only in the last couple years I have broken the $200+k barrier..

If you look at data from statscan it show the top 1% of earners in Canada earn $254k per year. Obviously the top 1% in Toronto is higher..

Wait for a correction. Hopefully they don't drop rates anytime soon. And have more than 100k ready next time a house drops under $1m

 

[bigthing25]

Wait for a correction. Hopefully they don't drop rates anytime soon. And have more than 100k ready next time a house drops under $1m

when do you think the rates will drop?

 

[sprite09]

when do you think the rates will drop?

better off checking what bond traders think:

TMX - Montréal Exchange - Canadian Interest Rate Expectations

www.m-x.ca

in the end , nobody knows , but we're closer to bottom than top (e.g., probably not the best idea to lock in for 5 yrs)

 

[chodge]

For sale: 426 CANTERBURY CRES, Oakville, Ontario L6J5K7 - W5956165 | REALTOR.ca

$1.786 Million will get you a 60*100 lot in SouthEast Oakville.

A bungalow used to sit on this lot; it was bought and torn down.

426 Canterbury Crescent - Google Maps

There are permits in place to construct a 4,500 Square Foot house with Pool; you build the house.

What about just buying the lot and parking an RV there? There's probably a By-Law that prohibits that.

How about renting a storage locker unit to sleep in ? They have 24/7 access Just no washrooms or kitchen just eat out every day and boom back to your stoagre unit to sleep

 

[Not getting younger]

I'm am 42 years old. I don't have a house that I currently live in to sell. it makes sense that as a first time buyer I cant afford a $ 1.3m mortgage.. so yes your probably correct that people who are considering a $1.5m are already in the market. It's only in the last couple years I have broken the $200+k barrier..

If you look at data from statscan it show the top 1% of earners in Canada earn $254k per year. Obviously the top 1% in Toronto is higher..

So many people don’t want to believe that $100k or better puts you in the countries top 10%.

without getting into anyone’s personal finances people….man some questions….

Assuming
First time buyer
GTA home cost ($1,000,000)
Standard bank 20% down.

$200,000

Let’s say you want to buy 10 years from today.
how many people can save $20,000 / year
????