Toronto Condos Are Well within the Affordability Range
When it comes to real estate here in the city, Toronto condos are hot. Not only are they available in every shape and style across the city but according to a new report from RBC, they are affordable as well.
According to the RBC Economics Report, the housing costs for a condo in Toronto will account for only 33.1% of the average household's median income. A report issued from BMO put that number even lower at 31%.
Affordability is calculated according to a family's pre-tax income and how much of it will be needed to pay the monthly mortgage. Other costs such as property taxes, utilities and insurance for the home are also factored into the equation.
The higher the percentage, the more difficult you're going to find it to own a house, townhouse, duplex or condominium. If you have to pay 50% of your income on mortgage payments, property taxes and utilities it will be difficult to make the mortgage payments and even harder to find a lender that would be willing to give you one. In a typical situation the percentage should be about 32% of the borrower’s gross income. This will include the maintenance costs for condos.
As the rate of interest climbs, the affordability range will go up. This is why it is so important to purchase a Toronto condo now while the rates are still so low. Locking in a low mortgage payment right now is the smartest thing you can do if you feel that you are within the affordability range and are ready to leave the renter’s market and head for something better.
Toronto condos make a lot of sense when it comes to the affordability feature associated with owning one. For many people it's the stepping stone they need in order to break into the single-family housing market in Toronto. Once you have built up a certain amount of equity in your condo you'll be in a much better position to take a look at a single-family dwelling, townhouse or even a duplex in the Toronto area.
Toronto condos are sitting within the affordability range right now and while the rates are low it's the best time to jump on board and become a property owner instead of a renter.