# Average mortgage in GTA



## Newby1983 (Apr 9, 2015)

Hello. I'm trying to determine how much debt is too much for buying a home in the GTA. There's obviously many variables to consider ie income, additional debt etc. but still can't find numbers. I don't want to go with what mortgage brokers tell me. Thanks


----------



## supperfly17 (Apr 18, 2012)

Newby1983 said:


> Hello. I'm trying to determine how much debt is too much for buying a home in the GTA. There's obviously many variables to consider ie income, additional debt etc. but still can't find numbers. I don't want to go with what mortgage brokers tell me. Thanks


We need to know your financial situation


----------



## cashinstinct (Apr 4, 2009)

My personal rule: maximum 3 times annual gross salary (before taxes).

Sure the bank will accept more.


----------



## My Own Advisor (Sep 24, 2012)

The bank will always want to give you more!


----------



## Kail (Feb 7, 2012)

House price - $454,900
10% Down - $45,490
Mortgage - $409,410
Joint Income - $135,000

Just a hair over 3x annual gross salary, and even that seemed too high for me but the wife won and I'm happy she did as we now own a detached home with a driveway AND garage AND a decent sized yard!

We're in Newmarket now and absolutely love it.

We qualified for way more but why be house poor? I like being able to eat.


----------



## FrugalTrader (Oct 13, 2008)

I'm a little more conservative where my mortgage max is 2x gross family income.


----------



## cashinstinct (Apr 4, 2009)

FrugalTrader said:


> I'm a little more conservative where my mortgage max is 2x gross family income.


That's what I did for my home in 2012, feel like the mortgage can be managed OK.

I could have accepted 3X salary (as said above), but personnally I did 2X salary.


----------



## Newby1983 (Apr 9, 2015)

supperfly17 said:


> Newby1983 said:
> 
> 
> > Hello. I'm trying to determine how much debt is too much for buying a home in the GTA. There's obviously many variables to consider ie income, additional debt etc. but still can't find numbers. I don't want to go with what mortgage brokers tell me. Thanks
> ...


Joint income = $140k gross
Principle residence = $375k down/$350k mortgage
Rental property = $60k down/$160k mortgage

Rsp/stocks/resp (2 kids)= $77k
Cash = $15k

No other debts.


----------



## cashinstinct (Apr 4, 2009)

what do you mean 375k down? the equity you have in current house?


----------



## Newby1983 (Apr 9, 2015)

cashinstinct said:


> what do you mean 375k down? the equity you have in current house?


Yes $375k equity.


----------



## cashinstinct (Apr 4, 2009)

Using 3 times annual income, it would mean 420k mortgage, so 70k more than current balance.

Therefore, if you are ready to put a 350k downpayment (375k equity - fees to sell current house), it would mean a 770k home, which is really close to your current home.

from my understanding of GTA real estate, you could get a shack?


----------



## cashinstinct (Apr 4, 2009)

Congrats for the equity in home / investments / no other debts.

You should consider that you have already a high exposure to personal real estate (375k) compared to other investments. 

I am unsure in this context that going for more home is the solution.


----------



## Newby1983 (Apr 9, 2015)

Thanks for all the replies. I'm trying to gauge our financial position after purchasing the home last year. We have no intentions of moving. I could not find unbiased info on how much mortgage one should take on. I agree 2x income may be difficult in the gta especially at 32 yrs old. I've not heard of 3x but it sounds we're more aligned with this.


----------



## Just a Guy (Mar 27, 2012)

Historically, banks would never lend more than 2.5-3x your income. Of course, once the rates dropped (and the potential profits) the banks eased this rule of thumb and started lending out at significantly higher ratios. 

It's interesting to point out that, during the times when they had the limits, you never heard of banks failing because of an unimaginable number of bad mortgages on the books. 

Then again, I'm not a big fan of only using declared income as there are tax strategies which can lower your taxable income if you don't solely rely on a paycheque.


----------



## sags (May 15, 2010)

I read that people are paying $15,000 a year in condo fees and municipal taxes in the GTA.

That is on top of mortgage, house insurance and utility payments.

I don't know how people manage it.


----------



## DollaWine (Aug 4, 2015)

sags said:


> I read that people are paying $15,000 a year in condo fees and municipal taxes in the GTA.
> 
> That is on top of mortgage, house insurance and utility payments.
> 
> I don't know how people manage it.


By putting an enormous amount of their income into their living expenses and leaving very little for savings I assume. Short-sightedness. A lot (not all) of people live in condos for the social status of it - a condo is the new "thing" that everyone wants to say they have.


----------



## Just a Guy (Mar 27, 2012)

From what I've seen, most people tend to live somewhat beyond their means (that's why they have lines of credit, a pile of credit cards that carry a balance, etc.). It's rare that I've found people who are financially intelligent. I've seen people pay 40-50k for used vehicles or furniture (easy payments of only $1000/month for only 4 years!) because they have poor credit and can't do math so they go to rent to own places. Then there are the payday loan people...

This is not a knock against people in general, just a sad statement about the average financial intelligence out there. Heck, most people have no idea what would happen to them if the interest rates started to rise instead of fall.


----------

