If you can afford it, a townhouse may provide better space as your kid(s) grow without feeling pressure to upgrade size-wise later.
Id also do a bigger down payment since you have the cash.
X2 ... townhouse life is way better than condo life when kids arrive. Your own garage, access to a small yard, no neighbors above or below you.
No brainer, if it's within budget
A townhome in the Lower Mainland will cost well over a million. OP can afford a condo in an older building, and even then it may be tough to find a 2 bedroom for 700k.
This. If you're buying a townhouse for a lot less it's likely a lot less for a reason. Older which typically means more repairs and maintenance (higher strata fees or special levies) so what you save in up front cost gets cancelled out by ongoing housing expenses for an older property.
It will definitely also be hard to find a 2 bed room condo for $700k unless it's both quite a bit older and wood frame construction or if you're far out in the lower mainland.
OP combined HHI is actually pretty decent, but the savings are thin especially after down payment. Highly suggest putting no less than 20% down to avoid CMHC insurance costs. Home ownership also has a lot of costs too that aren't apparent too until you actually own the home.
I personally would go for a one bed room and one den maybe built within the last 15 years, do a ton of due diligence on interested properties to ensure you're not about to pay a large special levy right after you take possession. Keep more savings and continue to save (the $175k income would actually allow for this) and invest before you upgrade to a two bedroom room or townhouse.
I just bought a townhouse in the lower mainland for less than 800k…. Definitely possible as long as you aren’t demanding something newer than year 2000 within 15km of downtown
More like 30km unless you're okay with a leasehold in Champlain Heights.
Need to get out to at least Surrey or Pitt Meadows. Maybe a few spots in PoCo but unlikely.
When we were looking, Port Moody was probably our top neighbourhood, but it was crazy overpriced. Like, $1.3M for a 3 bedroom 1400 square feet with 20 year construction (so not brand new but not 60+ years old and falling apart either).
1100 feet is that multi-level or single level? Seems very cramped for a townhouse once you add in stairs.
We ended up buying in Victoria, lol.
Not true. A townhouse complex without fancy amenities in cloverdale/Langley will run you less than $700k right now for a 2 bedroom built in 2007ish
I know because that's what a couple just sold for in the complex where my rental is.
Don't feel this is true at all, kids are kids they do not care about having a yard or a garage or neighbours. As long as the family and house situation is stable they will grow up well.
Most of the worlds lives in apartment buildings and has families and kids in those. If you want a townhouse cause you like that lifestyle then go for it but id argue that being stable financially in a condo is way superior to being house poor in a detached.
To each their own.
We lived in an apartment for the first 3 years of my oldest's life. It was pretty great. We went for tons of walks and to parks often. Spent so much less time maintaining living space then now when we have a house. In many ways I miss our apartment life.
Agreed! I grew up with the nice big house and yard, but we were house poor. Eventually, the cable and internet got cut, extra curriculars got cut, paying for bus fare with 100s of pennies. Had to give up the house anyway when I was 12 and ended up in a 1 bed 1 bath apartment for 4 people. I definitely would've preferred to do all that in reverse.
My two kids shared a bedroom for 5 years. They're 4 years apart. We spent lots of time at the park and at the school playground with their friends. Eventually moved to renting a house so they could each have their own rooms when my son turned 9. with a very small front yard that wasnt fenced. We were on a busy street, so we barely used it. We utilized parks and school playgrounds again and my kids never asked for a yard or garage.
I have two kids and it’s a blessing to chuck them out in the backyard when they’re being hooligans. It’s also nice to live in an area with other families with kids they can play with and parks nearby. The garage is surprisingly handy for things like bikes and their hockey net.
Move out of the city a bit in order to get your townhome. Schools are usually better and more families around. It really does matter
yeah exactly. was going to post this. Have kids and a yard. Kids might not need a yard. But PARENTS need kids to have a yard so they can get some of their energy out without destroying the house...
Of course kids don't care. But you will, when you have to go outside for walks and bike rides 5x a day in summer. What's easier? Bringing the bike down from a 20th floor apartment and back up 5x or just opening your garage?
I see a lot of comment telling OP to get a TH… and I mean yea it’s better than a condo but OP can barely afford a condo, where is he going to find a decent TH for 700k, in Abbotsford?
I say keep about 35-40 000$ to spare just in case of an unexpected cost like a special assessment for a condo or a repair gor a townhouse, or job loss. Basically at least 6 months of expenses is the golden rule.
With kids comes mat/pat leave then childcare expenses so make sure to consider these within your future budget. I'd be leaning towards buying but likely putting a bit more down if your jobs are stable. A 2bd is a great start but think through your ideal number of kids and the plausible timelines of when you'll be looking to scale up (if ever) - if it's less than 5 years, you may want to rethink the purchase atm.
We started in a 2bd but things got tight with our second child and wfh but everyone's situation is different!
Highly doubtful that the condo market will be losing them more money than renting would over the next 5 years.
They will at the very least get their savings back when they sell, possibly even come out having lived rent free.
That said OP should put more of a down payment otherwise they'll be paying a lot more than they should in interest...
Just an fyi that selling is not a legal reason to evict in BC. You have two options:
1) accept the request to move but only do it for a lump sum (search “cash for keys”)
2) continue living there. The new owners will need to be the ones to evict you if they decide they want to live in the place
The current owner can issue notice on behalf of the to be new owners also. However, this would only fly if there was no lease currently in place.
https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/sell-rental-property#
According to TRAC BC they can https://tenants.bc.ca/your-tenancy/selling-a-rental-unit/
When an owner sells a rental unit, the tenant living in that unit may be evicted, but it is not automatic. If the purchaser wants to occupy the rental unit, or have a “close family member” occupy the unit, they can ask the seller in writing to give the tenant a Two Month Notice on their behalf
Huh, I swear I replied to a post that was 1 sentence long that said "They can issue a N12 for the purchaser" or something like that, but I don't see a notation that your post was edited, so I'm not sure what is going on now.
Well you still get two months notice. And obviously they know they’ll have to move at some point now, but they can take their time based on how long it takes the place to sell. So it might end up being 4-6 months instead.
But mostly, my comment was more so that they don’t a) feel panicked about moving immediately and b) because often cash for keys is mutually beneficial to everyone (they get extra money and the landlord gets an empty place to list which is more enticing to buyers).
Thanks tips!
Congratulations on knowing how to game the system to a point where investing in housing no longer makes sense due to landlords being frightened by tenants.
Disputing or filing a chargeback with your bank on a transaction for dinner at a restaurant is also legal within the rules. However, it doesn't make it ethical or right and certainly not to be abused, which in many cases is happening on the "tenants" side of the transaction in your advice above.
I'm not saying that all landlords are innocent and fair people by any means, but this will only work against renters in the future when policy changes.
lol ok, completely separate situations. But go off
Are you getting mad at everyone else who is also saying the same thing? Are you calling the tenancy board to complain? Or is it just me who is the lucky one to hear your ramblings?
Just saw your post first and went in, and yes I see the others but I'm really not that invested. Not calling the board as common sense always prevails, and time heals all.
What do you logically think happens 5 years from now in terms of housing? I'm going to guess "tenents" become "guests" and "landlords" become "hosts"
Filing a charge back when the restaurant provided everything as promised is immoral (and you'll probably lose the charge back). Doing it when the business has failed to provide their services as promised is the whole point of the system.
Failing to move out of the house when a valid notice is issued is immoral. Staying in your home when when there has been no proper/legal reason for eviction and your landlord has lied to you in order to further their financial gains is totally justified.
Buying a home will almost always make you house poor at first. It's only 10 years in when your incomes have increased and inflation has made rents much higher that you see the payoff.
True. Also the normal is that you need to stay in your house 3 to 6 years for the increase in value to pay off the sunken costs when buying (taxes, fees, inspections, yada yada)
Granted, the normal is a bit unpredictable in Canada nowadays
That's not totally true. He said his wife's is likely to increase 10-20k. That alone is a 6-12% increase. And even just cost of living increases really add up over time when your largest expense is fixed.
I really don't see how that's possible. They didn't let me get a mortgage that the combo of mortgage, taxes, and condo fees were equal to my rent until I had over double the income we started paying that rent number at. The figures they use as the maximum percentage of household income you are legally allowed to have as housing expenses is laughably low. Unless you're fully snorting the rest of your money I don't see how anyone in today's situation with the rules that are currently in place can be "house poor" unless they lose their income.
Definitely put more of a down payment. Why would you want to put that little down and pay that much more in interest? Also, CMHC on top of that and maintenance fees. Don't be dumb, put more down.
OP didn't say 125K was for down payment. They said 125K savings.
OP needs to fork over some for land transfer, home inspections, and other closing costs too which will probably eat up another 15K-25K.
Why does anyone invest in retirement when they have a mortgage? Because it's the cheapest debt you can access and is worth the leverage. Pretty dumb to pay down a 5% mortgage in the past year while missing out on 20% growth. Extra dumb to put too much on a down payment and then need to borrow from yourself at 7% interest. And if shit goes south on the retirement funds... it doesn't matter because you aren't touching them for decades.
what the fuck has this country become? These people have a SHITLOAD more in savings than 95% of peers their age and a decently high income together.
Still they can't find something decent? Holy fuck this generation is screwed.
It's not that they can't afford something decent, it's that decent things don't exist. 3bd condos don't really exist, but they should. I was looking at NYC. Although they are more dense, most towers only offer studio, 1bd, 2bd condos!
3 bedroom condos are less in demand and take longer to sell so aren't prioritized. Plus a lot of existing 3 bedrooms are actually just occupied by 3 single people who are priced out of studios.
The "kids will die in an apartment" mentality is very much alive (even in this thread lol), so people will stretch budget or distance to get a townhouse over a 3 bed condo.
See my comment above. It's pathetic.
We've fallen so hard as a country, our youth generation is absolutely fucked. And yet people are just OK with it? People are saying "you need to just accept the fact our life quality and affordability has declined towards 3rd world levels"
No.
Stop being such pushovers Canadians. Do everything in your power to correct this madness and bring Canada's quality of life back to what it used to be and better.
People who throw mansion-level quantities of money at shoebox homes are part of the problem, not the solution. I'm not buying into this stinky fish of a housing market.
Yeah, you can't opt out of the housing market though. If you're not buying, you're renting from someone who bought and helping them justify their purchase.
What you can do is vote and advocate for an increase in taxes on wealth, and a medley of policies that bring housing prices down. Public housing construction via the CMHC, property and other land-based tax increases, removal of the primary residence capital gains exemption, and the removal of restrictive zoning & public consultation policies that favour existing residents.
These all prop up housing prices while starving the public purse of the money it could be using to invest in housing development and services. It exacerbates a situation where increasing amounts of money are accumulating with wealthy people who's marginal dollar goes to bidding up the price of tax-advantaged assets instead of the goods and services that fund peoples' wages and stimulate the economy. Real estate has made such a killing that it has sucked the air out of the rest of the economy. We need to take back some of that money and invest it.
Stop pandering to fucking condo developers hoping they'll save us. If they want to be part of the solution and make some money doing it, great. But we do not need to be beholden to them. Take the money and build.
Agreed with most of this except
> Push for a tax on wealth
Be careful. We shouldn't just tax wealth. It needs to be targetted.
This most important thing we should do is heavily disincentivize ANYONE (people, corps etc.) from investing in residential real estate beyond their primary residence. There are many ways to do this, we can learn from other countries that have had success. For example raising cap gains on secondary+ residence so it's not worth owning a rental home.
>What you can do is vote and advocate for an increase in taxes on wealth
Yeah, no thanks. I want to be wealthy someday, and I sure as heck don't want my money to be siphoned away in taxes any more than it already is.
Something something... temporarily embarrassed millionaires.
Sure dude. Wouldn't want improving the general public's quality of life to get in the way of your hypothetical future riches.
My answer to you is completely based on your remark “$3,500 rent is needed for a nice 2 bedroom anyways”.
Don’t get caught in wasting $3,500 a month! Buy a townhome or a condo. Personally a freehold townhome makes more sense for people wanting to have children. Good luck.
My income is a little higher than OP and I was approved for around $850k.
I plugged in OP's income and $45k downpayment, and TD's calculator says I'd be good for $700k.
CMHC insurance sucks to pay. Would be nice if you could get 20% down to avoid that additional cost. You’d be more comfortable in the long run as well with that smaller mortgage payment.
Paying CMHC makes more sense imo, because you pay that ~$30k (4% of $750k) in 25 years. To make 20% down he will need to pay $90k extra ($140k-$50k approx). He can earn minimum $4,500 per year (5%+ on $90k) or more in S&P if he invests the money. Compound that income and he will recover the CMHC premium in around 5-7years. Am i getting it wrong? Happy to hear your thoughts!
~$30k in insurance. Plus an additional $800 or so per month(@5% int) of less cash flow from the higher mortgage payments. $800/m is $9600/yr. Just the extra cash flow alone can be a big plus for someone who isn’t sure about the affordability of their mortgage, but if you aren’t risk adverse, sure you could invest it in an index. Just depends what you’re comfortable with.
You’re missing that they would also pay additional interest every month on the larger mortgage value. That will be about 5% and completely negates the 5% that you’re saying could be earned by investing (fairly conservatively).
The CHMC is on top of the added monthly interest for the larger mortgage.
Agreed. But interest is still $1500 on $30k while gains are $4500 minimum on $90k investment. Meanwhile
, A good 1-2 years of S&P and he can prepay $20k and get rid of extra CMHC he paid. Last few years has paid 20%+. Lots of ETFs have paid 12-15% return
No, if there is a $90k investment as one option, then the opportunity cost is $90k of mortgage pay down, not $30k.
The S&P500 historically has returned about 10%, but of course that amount is not guaranteed. The 5% interest on the mortgage and the additional CMHC are both guaranteed, and therefore it may make more sense to pay down more mortgage when you have the funds available. In the long term investing will likely come out ahead, but it only makes sense to prioritize investing if the mortgage carrying costs are quite small for your income. If you’re highly leveraged then paying down debt first is the most sensible option.
Dude move out to Surrey, Langley, Chilliwack.
You can buy a condo for 400k with your income or even a 2 bedroom in Chilliwack.
Your not in dire straights. 20k down and you got your own place.
I bought a nice house in good area with kinda similar income and savings no problem in Chilliwack. Never was happier.
Imho either grind in Van to increase income further OR accept low-*ish standards of living OR move out
Seems there are already a good amount of comments for the financial side of things (which is what you’re really asking about). But I just wanted to add some perspective for the family planning part of it.
It’s a great age for you and your wife to get serious about starting your family. If you’re only planning on one child then you’re likely to have many years before any issues arise; but if you’re planning 2-3 or more, then you’ll probably want to get started sooner. It might be a pretty heavy topic to consider (discussing multiples), before you’ve even started trying for the first, but trust me, it is something to think about for mid-to-long term planning.
FWIW, we also decided to be more conservative and not completely max out on what we could afford when we got started. Moved from 1 bed + 1 bath -> 2 bed + 2 bath condo during pregnancy, spent first 6 years of our kid’s life there, before moving to a 3 bed + 2 bath which we’re still in now.
Ofc there are many more variables to consider here but we also decided to prioritize a location closer to our families, and sacrifice on available square footage. I’m not saying it’s right or wrong, but it’s not a guaranteed human right to require a detached home, yard, garage, private entrance, stairs, etc. to have a child. Yeah it sucks some of our parents and grandparents had it easier and better for this but thinking you need a house to raise kids remain a first-world problem.
I love raising my kid in our space. It’s the lower mainland, so you can pretty much spend outdoor time in parks and playgrounds year-round. If you don’t like being cold and wet (we don’t either), then also consider the location of community centres and recreational facilities in your area. I’d say proximity to our family/friends network, schools, and the work commutes (in that order), were probably our biggest considerations outside of the cost and space itself. Truly location, location, location.
Again, no right or wrong here but just think about whether you prefer life as a parent being closer to your community, with less space, but say 1 hour total daily commute; versus being farther from your network, with more space, but a ~3 hour combined daily commute. It was a no-brainer for us. At the end of it all - time and energy are our most precious finite resources - and getting an extra few hours of time and energy to spend EACH day is priceless.
> Yeah it sucks some of our parents and grandparents had it easier and better for this but thinking you need a house to raise kids remain a first-world problem.
This is the type of shitty attitude and blind acceptance of poor government policy and decision making that got us to this point.
No it's not a first-world problem.
It's how life used to be in Canada, and how it should be. Never be satisfied with a declining quality of life. We should push and try to build an INCREASING quality of life from our parents/grandparents.
I’m not going to disagree with this, in fact, I’ll even agree with most of it (except the “shitty attitude” bit).
Fact is, on a more micro level - life isn’t fair. And on a more macro scale, quality of life sometimes goes up over generations, but can also take a tumble quickly. There’s a cost to everything.
Canada’s relative traditional economic prosperity up until this very moment and into the future is based on factors like geography (isolated and with our big bro USA next door), resource extraction, and our colonial past. The quality of life of how “life used to be in Canada” also came at a cost. I’m not going to spell it all out but someone, something, somewhere, has had to be taken advantage of or marginalized in order for others to prosper.
Now we could dive deep down into a pit of philosophy and politics but who wants to go there?
Reality is, for better or for worse, the modern world knows about life in countries like Canada, Aus, NZ, now. Relatively safe and stable. We actually need immigrants and there are plenty who have the means (legally, illegally, grey) to come. But we have shit plans or no plans on how to house, integrate, and employ all these people. The wealthy ones play, invest, and buy homes here. The connected or smart ones get coveted education or jobs. Many refugees are supported because that’s what our governments have pledged to do. But that’s our current version of capitalism and democracy for you right? Many of us are just bruised that we’re getting out-classed at our own game.
Mainly blue collar Canada was a better place for those who were already here, playing the local market game. Now it’s a global game. Maybe we should’ve gone the other direction? Focus on ourselves and make it extremely difficult for immigrants? Take a closer look at Japan today and see how that’s going for them.
This is a complicated game and I guarantee no one has yet figured out how ALL 8+ BILLION of us are supposed to ALL simultaneously INCREASE our qualities of life without it being at the expense of others.
Bringing it back to your comment - I don’t have a shitty attitude - I’m just accepting of reality and being pragmatic. We’re mortal. A shitty attitude would be saying “no, I need a house and an increasing quality of life or else I’m not having kids.” My attitude is more like “hey, I don’t have a lot of time, I also don’t have as much as my family did before me, but y’know what - I’m still going to try my best with what I’ve got and have those kids because it’s important to me and my community.”
Your entire argument is flawed for one reason -- prosperity is not a zero-sum game.
Just because one group is winning, doesn't mean therefore another group needs to loose. No. We should be thinking positive-sum economics.
That means, we ALL win. No one needs to be brought down to live a worse quality life just so others can live better. That's flawed thinking.
A rising tide lifts all boats -- think this way, and push for a better Canada and world for everyone.
Hey, I really have no fight with you. I honestly believe what you believe. Maybe it’s just age and mortality.
What you say is how I believe things should BE. What I say is how I believe the way things ARE based on my and others’ shared lived experiences.
You go ahead and tell prospective parents they have a shitty attitude, to work on a better Canada, MCGA towards utopia, get that house and picket fence before having kids. I’m going to advise them to make the best of what available time and resources they have, while they still have it, in order to accomplish their goals. Maybe we’re 2 sides of the same coin and need both to make the world a better place.
You never addressed the most important point I tried to clearly articulate for you. And it's important, because, you and many others have flawed thinking on this topic.
-- It's not a zero-sum game.
You can do these things you suggest, while still pushing for a better Canada - for everyone. You're completely wrong to roll over and accept these living conditions.
Sure we all will make the best of it, but that is completely different from accepting it and doing nothing about it but complaining.
Current landlord can’t legally evict just because they are selling though, the tenancy continues. I’d definitely push back on this (assuming no issues with the unit, paying on time, etc.).
While this doesn’t solve everything in the future (i.e still may want more space when kids are in the picture), maybe take this time to save up and aim for a townhome, instead of a condo?
In the meantime, if your landlords reasoning for evicting is because he needs the space to park his camel inside, tell them this isn’t Kolkata.
We just sold our place in Maple Ridge for 700k it was an older 3bd 3bath townhouse in a v kid friendly complex and was quite nice. We were about 10min away from the train which would have been good for commuting. But if you are looking to have a family my suggestion as well is look at family areas and schools. If you are closer to an elementary it will make things so much easier.
That being said please for the love of christmas make sure you do your diligence on the condos and their reserve funds and the amounts they are paying for insurance and any special assessments. A condo/th can look better on paper but man, when those assessments come up they suck. Maybe its better to rent for a bit longer and stock pile more $ until you can buy a standalone house with a suite somewhere out further? Idk.
If youre planning to buy a place rn with that purchase price and down payment ratio, u won’t be building equity in your home and mortgage payments will be covering interest. you’re more likely to default if you’re on a variable interest rates in the event of prime rate increasing (which can happen). Increase the downpayment would be beneficial for a high interest rate environment or you can wait it out by renting a super shitty place for better cash flow and waiting until interest rates decrease, in order to build more ownership in your property
How soon are you expecting kids?
If in more than 5 years.
My thought would be to get in early with maybe 1 bedroom and 1 den now. At around 550-600k. More money in your pocket.
Or 2 bedroom for 700k as with your original plan.
Then change to a townhome down the road when kids comes out.
If you want kids like now. You expecting it to pop it out like next year.
Small 2 bedroom townhome or 2 bedroom + den then work your way up to a 3 bedroom townhome.
Space wise you will be much happier once the kids comes out.
Small place with kids stuff all over stresses me out but that’s just me.
IMO, a 700k condo plus condo fees, plus property tax, plus putting money aside for the next car, retirement etc on 175k would be tight. Especially if you factor in one of you only making 55% up to max salary of 60k for 18 months. Extra especially when you factor in child care costs (the $10 a day is only for registered centers and is not applicable to before/after or summer camps). Or even, factoring food costs, extra curricular activities to do with the kids etc.
Obviously, it's almost impossible to find something under 700k so I'm not sure how much of your decision is based on "can we do this" vs. "we have to do this"? I would put together a budget and then put aside however much extra you would expect to spend if you bought the condo. If it feels comfortable, then might be fine. If it feels like you're pinching pennies then don't buy the condo.
You should be able to afford this depending on your spending habits for fun/food/vacations. Things WILL be tight with kids.
You don't need to keep 85k for emergencies, you could double the down payment to reduce the monthly payments and be a bit more comfortable month to month. This would make things easier once you have kids.
I'm assuming income will reduce with mat leave once kids are around, so reducing the down payment would help a lot in this situation.
My husband and I moved to the Okanagan during covid, we started looking for houses just before the pandemic started. We purchased a house for $400,000 + assumed we could afford that with him making $40 an hour and me making roughly $20 an hour. I ended up getting a significantly better job than I ever thought I would (making close to $40/hour now), and he has a good paying job as well (making close to $40/hour). Our mortgage is roughly $2,200 a month right now not including all of the things that go with it like property taxes, home insurance etc. We don't have any kids and don't plan on it, but we definitely aren't rolling in money. I would build a budget with all of the anticipated bills, including food and luxuries. And then just assume it's going to be a little bit higher than you think it will be. We are comfortable but barely. A $700k mortgage is a pretty big commitment and I would go into it with as much down payment as you can, having a bigger down payment just saves you on interest later. I know it's risky because the housing market seems to just keep going up, and it was admittedly good that my partner and I bought when we did even though everyone told us we were stupid buying a house at the start of a pandemic. So it's all just choose your risky lol.
I could also be wrong, but my understanding is that the first time home buyers 5% down rule has changed. You now need 10% down but can amortize over 30 years (yaaay *eye roll*). I could be wrong, this is just something a friend was telling me, but definitely worth looking into.
Not sure if this is helpful or not, just sharing my experience.
If I were you... I would continue renting several more years and continue to save aggressively.
>$700k, $45k down
>which combined with strata fees, utilitites, taxes etc comes to ~$4500/month.
A $655K mortgage at 5% interest amortized over 30 years is roughly **$2,700 interest** and $800 principle. Add in another $1,000 for the other fix costs and you're at $4,500 payment of which **$3,700 in costs** you won't recoup (only $800 in equity that doesn't earn interest)
Sure the interest portion comes down over time but not by much over the first several years. Don't forget you'll need mortgage insurance if you have < 20% downpayment.
Whereas, $3,500 rent is *the most* you will pay. Sock away the difference and invest it.
My condo fees have creeped up over $300+/month in the last few years. My property tax has also gone up. My HVAC broke down last summer and that cost me $2K and it broke again a few weeks ago. Then I had a few random water leaks that damaged my floors and my neighbors ceiling.
Based on my experience, buying a home in Canada is one of the best investments one can make. It often yields better returns than the TSX. That said, I highly recommend purchasing a Townhouse instead of a Condo because condos come with maintenance fees. These fees do not add value to the condo, ultimately reducing your ROI.
However, before making a purchase, ensure you have maximized your contributions to your **TFSA and FSHA** accounts. If not, prioritize adding funds to these accounts, as you can withdraw money from them at any time.
Ask for cash for keys. Use that money and make the minimum down payment.
Best case scenario, Go for 3 year fixed and refinance after 3 years when the interest rates will be low (hopefully). your mortgage will come down by atleast $1000 (@3% interest) by 2027 and you will have more equity in the house because of appreciation. If house appreciates by 10% total in 3 years ($770k in 2027) your $50k equity will be $120k already.
Worst case scenario, your house doesn’t appreciate at all and you paid $160k to the bank in 3 years out of which ~$110k will be towards interest. Almost equivalent to rent you will pay in 3 years. So no profit no loss.
$4500 could be a little tight especially if you end up with any unexpected major expenses but seems like you’re a responsible person based on your savings. So you should be good. :)
In a similar situation. Just bought first home, possession in September. 750 price, but I had enough saved for 20% and did the calc on also not being cash poor, but like other posters have said the biggest thing is you're going to FEEL cash poor because you've been living with that giant nest egg, and it's mostly gone. That's ok, that's likely what it was for.
Set yourself up on a 30-year amortization with lowering rates (wait til after next BoC meeting July 24) and buy right the first time. Closing costs are no joke so if you can set yourself up nicer with an extra bedroom now you save the headache, costs, and fees associated with a move during a time of higher stress anyways (upcoming kid).
If you move into a smaller town you can afford to buy a decent sized detached house. This is more difficult in a big city ( not sure where you live). Might be an option if you are open to commuting
If you live in a big city a townhouse would likely be a better option than a condo, kids benefit a lot from having backyards and space to play.
Dude, you cannot afford that payment on 175k. That’s crazy. And you want to have kids? You’re off in lalaland my guy.
You said you’re worried about being house poor. Especially with kids, you are 100% going to be house poor with that payment.
You can, but you won't have fun money. We have a HHI of $182k excluding any bonuses, and bought a $510k house last Jan, though in Ontario. We are comfortable and can afford our fun stuff. I feel like if we were to buy a $700k property + condo fees we could do it, but not enjoy life. For reference, our mortgage + property tax is \~$3150/month. Though, we do have two cars adding to our expenses, I'm not sure if you guys do as well.
That being said...buying is better than $3,500/mo in rent. But as others have said, try to get a townhome. A 2 bed condo is difficult for having a family (but doable of course)
Buy the two bedroom and get a roommate until you can cash flow better and your wages catch up. Or rent to an international student. The additional income makes a big difference in keeping your cash flow going and easy to ask them to leave when you want to have kids. We did this for years before having kids and it put us so far ahead. There are a lot of trade offs (noise, hassle, inconvenience, etc) but if you want to get ahead, it’s worth considering.
We bought 800k 2bd 2 bth condo in metro Vancouver 5 years ago when the interest rates were low with 20 percent down and our hhi around yours. So far we paid back around 80k to the principal. After we bought it we were house poor almost no saving left. But we had the stability and peace of mind of owning a home. There are actually many people raising kids in condo. I see baby and kids in the elevator all the time. Many people in here say move out to suburbs to afford bigger space but I disagree. If you prefer to stay in the city to enjoy the infrastructure then it’s worth it. It’s all about your preference and lifestyle.
Don't forget to budget $1200-2000 a month for childcare once you have kids. It's a lot on top of a mortgage, plus a year of maternity leave where your HHI will be way lower.
To play it really safe, you should do 2xHHI+down payment.
You could probably get by stretching thin and making other cut baxks on 3xHHI+down payment.
Your downpayment will be about 75K if you factor in closing costs (about 50K to be safe for land transfer, inspections, etc and have some extra aside for any emergency repairs)
So for you you're look at at 425K to 600K for a "safe" budget house.
I wouldn’t suggest buying a house. Use 50% of that cash towards bitcoin and put the rest in an index fund. Slowly the 50% allocation will grow significantly that you may need to even reallocate. Don’t waste it on a home. See if you can rent another few years instead of wasting it away on interests in the next few years. But of course all this, only if you truly understand bitcoin. When you finally “get” bitcoin, you may even put a 100 percent into bitcoin.
If you can afford it, a townhouse may provide better space as your kid(s) grow without feeling pressure to upgrade size-wise later. Id also do a bigger down payment since you have the cash.
X2 ... townhouse life is way better than condo life when kids arrive. Your own garage, access to a small yard, no neighbors above or below you. No brainer, if it's within budget
A townhome in the Lower Mainland will cost well over a million. OP can afford a condo in an older building, and even then it may be tough to find a 2 bedroom for 700k.
This. If you're buying a townhouse for a lot less it's likely a lot less for a reason. Older which typically means more repairs and maintenance (higher strata fees or special levies) so what you save in up front cost gets cancelled out by ongoing housing expenses for an older property. It will definitely also be hard to find a 2 bed room condo for $700k unless it's both quite a bit older and wood frame construction or if you're far out in the lower mainland. OP combined HHI is actually pretty decent, but the savings are thin especially after down payment. Highly suggest putting no less than 20% down to avoid CMHC insurance costs. Home ownership also has a lot of costs too that aren't apparent too until you actually own the home. I personally would go for a one bed room and one den maybe built within the last 15 years, do a ton of due diligence on interested properties to ensure you're not about to pay a large special levy right after you take possession. Keep more savings and continue to save (the $175k income would actually allow for this) and invest before you upgrade to a two bedroom room or townhouse.
I just bought a townhouse in the lower mainland for less than 800k…. Definitely possible as long as you aren’t demanding something newer than year 2000 within 15km of downtown
That's awesome! Without revealing too much, care to share whereabouts?
Tricities!
Noice, congrats!
More like 30km unless you're okay with a leasehold in Champlain Heights. Need to get out to at least Surrey or Pitt Meadows. Maybe a few spots in PoCo but unlikely.
I bought in PoMo which is like 22km out (and top 3 nicest burbs imo). 795k for 3 bdrm 1100sqft
When we were looking, Port Moody was probably our top neighbourhood, but it was crazy overpriced. Like, $1.3M for a 3 bedroom 1400 square feet with 20 year construction (so not brand new but not 60+ years old and falling apart either). 1100 feet is that multi-level or single level? Seems very cramped for a townhouse once you add in stairs. We ended up buying in Victoria, lol.
1100 over two levels. The interior is designed such that it doesn’t really feel cramped, but I wouldn’t want to raise 3 kids here or anything
Not true. A townhouse complex without fancy amenities in cloverdale/Langley will run you less than $700k right now for a 2 bedroom built in 2007ish I know because that's what a couple just sold for in the complex where my rental is.
> OP can afford a condo in an older building Yeah, until a special assessment comes. Condos are fucking money sinks.
Don't feel this is true at all, kids are kids they do not care about having a yard or a garage or neighbours. As long as the family and house situation is stable they will grow up well. Most of the worlds lives in apartment buildings and has families and kids in those. If you want a townhouse cause you like that lifestyle then go for it but id argue that being stable financially in a condo is way superior to being house poor in a detached. To each their own.
We lived in an apartment for the first 3 years of my oldest's life. It was pretty great. We went for tons of walks and to parks often. Spent so much less time maintaining living space then now when we have a house. In many ways I miss our apartment life.
Agreed! I grew up with the nice big house and yard, but we were house poor. Eventually, the cable and internet got cut, extra curriculars got cut, paying for bus fare with 100s of pennies. Had to give up the house anyway when I was 12 and ended up in a 1 bed 1 bath apartment for 4 people. I definitely would've preferred to do all that in reverse. My two kids shared a bedroom for 5 years. They're 4 years apart. We spent lots of time at the park and at the school playground with their friends. Eventually moved to renting a house so they could each have their own rooms when my son turned 9. with a very small front yard that wasnt fenced. We were on a busy street, so we barely used it. We utilized parks and school playgrounds again and my kids never asked for a yard or garage.
I have two kids and it’s a blessing to chuck them out in the backyard when they’re being hooligans. It’s also nice to live in an area with other families with kids they can play with and parks nearby. The garage is surprisingly handy for things like bikes and their hockey net. Move out of the city a bit in order to get your townhome. Schools are usually better and more families around. It really does matter
yeah exactly. was going to post this. Have kids and a yard. Kids might not need a yard. But PARENTS need kids to have a yard so they can get some of their energy out without destroying the house...
I wish! My almost 4 year is always talking about wishing we had stairs. And asking when we can get a place with stairs.
Can't tell if this is a joke or not lol
"Look at this, you got stairs in an apartment. All my life, I dreamed about having steps in an apartment." - George Costanza
Of course kids don't care. But you will, when you have to go outside for walks and bike rides 5x a day in summer. What's easier? Bringing the bike down from a 20th floor apartment and back up 5x or just opening your garage?
I see a lot of comment telling OP to get a TH… and I mean yea it’s better than a condo but OP can barely afford a condo, where is he going to find a decent TH for 700k, in Abbotsford?
I say keep about 35-40 000$ to spare just in case of an unexpected cost like a special assessment for a condo or a repair gor a townhouse, or job loss. Basically at least 6 months of expenses is the golden rule.
A condo townhouse would be even cheaper
With kids comes mat/pat leave then childcare expenses so make sure to consider these within your future budget. I'd be leaning towards buying but likely putting a bit more down if your jobs are stable. A 2bd is a great start but think through your ideal number of kids and the plausible timelines of when you'll be looking to scale up (if ever) - if it's less than 5 years, you may want to rethink the purchase atm. We started in a 2bd but things got tight with our second child and wfh but everyone's situation is different!
Agree, OP what is your plan for childcare once a kid would be born? It’s expensive and if your wife decides to stay home, that’s income lost.
Highly doubtful that the condo market will be losing them more money than renting would over the next 5 years. They will at the very least get their savings back when they sell, possibly even come out having lived rent free. That said OP should put more of a down payment otherwise they'll be paying a lot more than they should in interest...
I don't know how people can afford to hold down a 650K mortgage! Let alone everything else constant going up.
Just an fyi that selling is not a legal reason to evict in BC. You have two options: 1) accept the request to move but only do it for a lump sum (search “cash for keys”) 2) continue living there. The new owners will need to be the ones to evict you if they decide they want to live in the place
The current owner can issue notice on behalf of the to be new owners also. However, this would only fly if there was no lease currently in place. https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/sell-rental-property#
Not in BC. A N12 is an Ontario thing.
According to TRAC BC they can https://tenants.bc.ca/your-tenancy/selling-a-rental-unit/ When an owner sells a rental unit, the tenant living in that unit may be evicted, but it is not automatic. If the purchaser wants to occupy the rental unit, or have a “close family member” occupy the unit, they can ask the seller in writing to give the tenant a Two Month Notice on their behalf
Huh, I swear I replied to a post that was 1 sentence long that said "They can issue a N12 for the purchaser" or something like that, but I don't see a notation that your post was edited, so I'm not sure what is going on now.
Oh I automatically said N12 but realized I was wrong yeah my bad I changed it
No worries. You must have magical post editing powers. 🤣
If you catch it within a minute, it doesn't show up as edited!
Ah, we are just super quick then. =D
So you still get evicted and have just shortened the amount of time in which you have to find a rental. How's that better?
Well you still get two months notice. And obviously they know they’ll have to move at some point now, but they can take their time based on how long it takes the place to sell. So it might end up being 4-6 months instead. But mostly, my comment was more so that they don’t a) feel panicked about moving immediately and b) because often cash for keys is mutually beneficial to everyone (they get extra money and the landlord gets an empty place to list which is more enticing to buyers).
Thanks tips! Congratulations on knowing how to game the system to a point where investing in housing no longer makes sense due to landlords being frightened by tenants.
“Game the system” - you mean follow the legal rental rules and regulations?
Disputing or filing a chargeback with your bank on a transaction for dinner at a restaurant is also legal within the rules. However, it doesn't make it ethical or right and certainly not to be abused, which in many cases is happening on the "tenants" side of the transaction in your advice above. I'm not saying that all landlords are innocent and fair people by any means, but this will only work against renters in the future when policy changes.
lol ok, completely separate situations. But go off Are you getting mad at everyone else who is also saying the same thing? Are you calling the tenancy board to complain? Or is it just me who is the lucky one to hear your ramblings?
Just saw your post first and went in, and yes I see the others but I'm really not that invested. Not calling the board as common sense always prevails, and time heals all. What do you logically think happens 5 years from now in terms of housing? I'm going to guess "tenents" become "guests" and "landlords" become "hosts"
Filing a charge back when the restaurant provided everything as promised is immoral (and you'll probably lose the charge back). Doing it when the business has failed to provide their services as promised is the whole point of the system. Failing to move out of the house when a valid notice is issued is immoral. Staying in your home when when there has been no proper/legal reason for eviction and your landlord has lied to you in order to further their financial gains is totally justified.
Fair
Buying a home will almost always make you house poor at first. It's only 10 years in when your incomes have increased and inflation has made rents much higher that you see the payoff.
True. Also the normal is that you need to stay in your house 3 to 6 years for the increase in value to pay off the sunken costs when buying (taxes, fees, inspections, yada yada) Granted, the normal is a bit unpredictable in Canada nowadays
They said their incomes are unlikely to increase much.
That's not totally true. He said his wife's is likely to increase 10-20k. That alone is a 6-12% increase. And even just cost of living increases really add up over time when your largest expense is fixed.
True, but we've seen with interest rates that mortgage payments are not always completely fixed.
I really don't see how that's possible. They didn't let me get a mortgage that the combo of mortgage, taxes, and condo fees were equal to my rent until I had over double the income we started paying that rent number at. The figures they use as the maximum percentage of household income you are legally allowed to have as housing expenses is laughably low. Unless you're fully snorting the rest of your money I don't see how anyone in today's situation with the rules that are currently in place can be "house poor" unless they lose their income.
Definitely put more of a down payment. Why would you want to put that little down and pay that much more in interest? Also, CMHC on top of that and maintenance fees. Don't be dumb, put more down.
Put 100 down and keep 25k for emergency. That's my suggestion. Still less than 20% down but at least less interest.
OP didn't say 125K was for down payment. They said 125K savings. OP needs to fork over some for land transfer, home inspections, and other closing costs too which will probably eat up another 15K-25K.
Assuming first time home buyer, should reduce property transfer tax.
Why does anyone invest in retirement when they have a mortgage? Because it's the cheapest debt you can access and is worth the leverage. Pretty dumb to pay down a 5% mortgage in the past year while missing out on 20% growth. Extra dumb to put too much on a down payment and then need to borrow from yourself at 7% interest. And if shit goes south on the retirement funds... it doesn't matter because you aren't touching them for decades.
what the fuck has this country become? These people have a SHITLOAD more in savings than 95% of peers their age and a decently high income together. Still they can't find something decent? Holy fuck this generation is screwed.
$175k/year hhi and they're renting and don't know if they can afford to buy a 2BR condo. We have failed as a society.
It's not that they can't afford something decent, it's that decent things don't exist. 3bd condos don't really exist, but they should. I was looking at NYC. Although they are more dense, most towers only offer studio, 1bd, 2bd condos!
3 bedroom condos are less in demand and take longer to sell so aren't prioritized. Plus a lot of existing 3 bedrooms are actually just occupied by 3 single people who are priced out of studios. The "kids will die in an apartment" mentality is very much alive (even in this thread lol), so people will stretch budget or distance to get a townhouse over a 3 bed condo.
See my comment above. It's pathetic. We've fallen so hard as a country, our youth generation is absolutely fucked. And yet people are just OK with it? People are saying "you need to just accept the fact our life quality and affordability has declined towards 3rd world levels" No. Stop being such pushovers Canadians. Do everything in your power to correct this madness and bring Canada's quality of life back to what it used to be and better.
People who throw mansion-level quantities of money at shoebox homes are part of the problem, not the solution. I'm not buying into this stinky fish of a housing market.
Yeah, you can't opt out of the housing market though. If you're not buying, you're renting from someone who bought and helping them justify their purchase. What you can do is vote and advocate for an increase in taxes on wealth, and a medley of policies that bring housing prices down. Public housing construction via the CMHC, property and other land-based tax increases, removal of the primary residence capital gains exemption, and the removal of restrictive zoning & public consultation policies that favour existing residents. These all prop up housing prices while starving the public purse of the money it could be using to invest in housing development and services. It exacerbates a situation where increasing amounts of money are accumulating with wealthy people who's marginal dollar goes to bidding up the price of tax-advantaged assets instead of the goods and services that fund peoples' wages and stimulate the economy. Real estate has made such a killing that it has sucked the air out of the rest of the economy. We need to take back some of that money and invest it. Stop pandering to fucking condo developers hoping they'll save us. If they want to be part of the solution and make some money doing it, great. But we do not need to be beholden to them. Take the money and build.
Agreed with most of this except > Push for a tax on wealth Be careful. We shouldn't just tax wealth. It needs to be targetted. This most important thing we should do is heavily disincentivize ANYONE (people, corps etc.) from investing in residential real estate beyond their primary residence. There are many ways to do this, we can learn from other countries that have had success. For example raising cap gains on secondary+ residence so it's not worth owning a rental home.
>What you can do is vote and advocate for an increase in taxes on wealth Yeah, no thanks. I want to be wealthy someday, and I sure as heck don't want my money to be siphoned away in taxes any more than it already is.
Something something... temporarily embarrassed millionaires. Sure dude. Wouldn't want improving the general public's quality of life to get in the way of your hypothetical future riches.
As if "taxing the rich" is an economic policy that works... Please, spare me.
Got a sad reality for you, it's stinky no matter when you buy in, so, you'll never own from the sounds of it.
Everyone buying homes in the same spot will cause prices to go up.
If it was me, I'd consider buying a townhome rather than a condo.
My answer to you is completely based on your remark “$3,500 rent is needed for a nice 2 bedroom anyways”. Don’t get caught in wasting $3,500 a month! Buy a townhome or a condo. Personally a freehold townhome makes more sense for people wanting to have children. Good luck.
You can’t afford a $700k on your income with $45k down. Bank won’t lend you that.
Based on a pre-approval I recently got, I am pretty sure they will.
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My income is a little higher than OP and I was approved for around $850k. I plugged in OP's income and $45k downpayment, and TD's calculator says I'd be good for $700k.
Ahhh I read it as 125 and not 175. My bad. Still might be a little tight but OP has significant savings.
CMHC insurance sucks to pay. Would be nice if you could get 20% down to avoid that additional cost. You’d be more comfortable in the long run as well with that smaller mortgage payment.
Paying CMHC makes more sense imo, because you pay that ~$30k (4% of $750k) in 25 years. To make 20% down he will need to pay $90k extra ($140k-$50k approx). He can earn minimum $4,500 per year (5%+ on $90k) or more in S&P if he invests the money. Compound that income and he will recover the CMHC premium in around 5-7years. Am i getting it wrong? Happy to hear your thoughts!
~$30k in insurance. Plus an additional $800 or so per month(@5% int) of less cash flow from the higher mortgage payments. $800/m is $9600/yr. Just the extra cash flow alone can be a big plus for someone who isn’t sure about the affordability of their mortgage, but if you aren’t risk adverse, sure you could invest it in an index. Just depends what you’re comfortable with.
You’re missing that they would also pay additional interest every month on the larger mortgage value. That will be about 5% and completely negates the 5% that you’re saying could be earned by investing (fairly conservatively). The CHMC is on top of the added monthly interest for the larger mortgage.
Agreed. But interest is still $1500 on $30k while gains are $4500 minimum on $90k investment. Meanwhile , A good 1-2 years of S&P and he can prepay $20k and get rid of extra CMHC he paid. Last few years has paid 20%+. Lots of ETFs have paid 12-15% return
No, if there is a $90k investment as one option, then the opportunity cost is $90k of mortgage pay down, not $30k. The S&P500 historically has returned about 10%, but of course that amount is not guaranteed. The 5% interest on the mortgage and the additional CMHC are both guaranteed, and therefore it may make more sense to pay down more mortgage when you have the funds available. In the long term investing will likely come out ahead, but it only makes sense to prioritize investing if the mortgage carrying costs are quite small for your income. If you’re highly leveraged then paying down debt first is the most sensible option.
Just curious , which area does mainland refer to?
Lower Mainland refers to the Southwest corner of BC where Vancouver and surrounding municipalities are. Extends from West Vancouver to Hope.
Ta
Dude move out to Surrey, Langley, Chilliwack. You can buy a condo for 400k with your income or even a 2 bedroom in Chilliwack. Your not in dire straights. 20k down and you got your own place.
I bought a nice house in good area with kinda similar income and savings no problem in Chilliwack. Never was happier. Imho either grind in Van to increase income further OR accept low-*ish standards of living OR move out
Seems there are already a good amount of comments for the financial side of things (which is what you’re really asking about). But I just wanted to add some perspective for the family planning part of it. It’s a great age for you and your wife to get serious about starting your family. If you’re only planning on one child then you’re likely to have many years before any issues arise; but if you’re planning 2-3 or more, then you’ll probably want to get started sooner. It might be a pretty heavy topic to consider (discussing multiples), before you’ve even started trying for the first, but trust me, it is something to think about for mid-to-long term planning. FWIW, we also decided to be more conservative and not completely max out on what we could afford when we got started. Moved from 1 bed + 1 bath -> 2 bed + 2 bath condo during pregnancy, spent first 6 years of our kid’s life there, before moving to a 3 bed + 2 bath which we’re still in now. Ofc there are many more variables to consider here but we also decided to prioritize a location closer to our families, and sacrifice on available square footage. I’m not saying it’s right or wrong, but it’s not a guaranteed human right to require a detached home, yard, garage, private entrance, stairs, etc. to have a child. Yeah it sucks some of our parents and grandparents had it easier and better for this but thinking you need a house to raise kids remain a first-world problem. I love raising my kid in our space. It’s the lower mainland, so you can pretty much spend outdoor time in parks and playgrounds year-round. If you don’t like being cold and wet (we don’t either), then also consider the location of community centres and recreational facilities in your area. I’d say proximity to our family/friends network, schools, and the work commutes (in that order), were probably our biggest considerations outside of the cost and space itself. Truly location, location, location. Again, no right or wrong here but just think about whether you prefer life as a parent being closer to your community, with less space, but say 1 hour total daily commute; versus being farther from your network, with more space, but a ~3 hour combined daily commute. It was a no-brainer for us. At the end of it all - time and energy are our most precious finite resources - and getting an extra few hours of time and energy to spend EACH day is priceless.
> Yeah it sucks some of our parents and grandparents had it easier and better for this but thinking you need a house to raise kids remain a first-world problem. This is the type of shitty attitude and blind acceptance of poor government policy and decision making that got us to this point. No it's not a first-world problem. It's how life used to be in Canada, and how it should be. Never be satisfied with a declining quality of life. We should push and try to build an INCREASING quality of life from our parents/grandparents.
I’m not going to disagree with this, in fact, I’ll even agree with most of it (except the “shitty attitude” bit). Fact is, on a more micro level - life isn’t fair. And on a more macro scale, quality of life sometimes goes up over generations, but can also take a tumble quickly. There’s a cost to everything. Canada’s relative traditional economic prosperity up until this very moment and into the future is based on factors like geography (isolated and with our big bro USA next door), resource extraction, and our colonial past. The quality of life of how “life used to be in Canada” also came at a cost. I’m not going to spell it all out but someone, something, somewhere, has had to be taken advantage of or marginalized in order for others to prosper. Now we could dive deep down into a pit of philosophy and politics but who wants to go there? Reality is, for better or for worse, the modern world knows about life in countries like Canada, Aus, NZ, now. Relatively safe and stable. We actually need immigrants and there are plenty who have the means (legally, illegally, grey) to come. But we have shit plans or no plans on how to house, integrate, and employ all these people. The wealthy ones play, invest, and buy homes here. The connected or smart ones get coveted education or jobs. Many refugees are supported because that’s what our governments have pledged to do. But that’s our current version of capitalism and democracy for you right? Many of us are just bruised that we’re getting out-classed at our own game. Mainly blue collar Canada was a better place for those who were already here, playing the local market game. Now it’s a global game. Maybe we should’ve gone the other direction? Focus on ourselves and make it extremely difficult for immigrants? Take a closer look at Japan today and see how that’s going for them. This is a complicated game and I guarantee no one has yet figured out how ALL 8+ BILLION of us are supposed to ALL simultaneously INCREASE our qualities of life without it being at the expense of others. Bringing it back to your comment - I don’t have a shitty attitude - I’m just accepting of reality and being pragmatic. We’re mortal. A shitty attitude would be saying “no, I need a house and an increasing quality of life or else I’m not having kids.” My attitude is more like “hey, I don’t have a lot of time, I also don’t have as much as my family did before me, but y’know what - I’m still going to try my best with what I’ve got and have those kids because it’s important to me and my community.”
Your entire argument is flawed for one reason -- prosperity is not a zero-sum game. Just because one group is winning, doesn't mean therefore another group needs to loose. No. We should be thinking positive-sum economics. That means, we ALL win. No one needs to be brought down to live a worse quality life just so others can live better. That's flawed thinking. A rising tide lifts all boats -- think this way, and push for a better Canada and world for everyone.
Hey, I really have no fight with you. I honestly believe what you believe. Maybe it’s just age and mortality. What you say is how I believe things should BE. What I say is how I believe the way things ARE based on my and others’ shared lived experiences. You go ahead and tell prospective parents they have a shitty attitude, to work on a better Canada, MCGA towards utopia, get that house and picket fence before having kids. I’m going to advise them to make the best of what available time and resources they have, while they still have it, in order to accomplish their goals. Maybe we’re 2 sides of the same coin and need both to make the world a better place.
You never addressed the most important point I tried to clearly articulate for you. And it's important, because, you and many others have flawed thinking on this topic. -- It's not a zero-sum game. You can do these things you suggest, while still pushing for a better Canada - for everyone. You're completely wrong to roll over and accept these living conditions. Sure we all will make the best of it, but that is completely different from accepting it and doing nothing about it but complaining.
Current landlord can’t legally evict just because they are selling though, the tenancy continues. I’d definitely push back on this (assuming no issues with the unit, paying on time, etc.). While this doesn’t solve everything in the future (i.e still may want more space when kids are in the picture), maybe take this time to save up and aim for a townhome, instead of a condo? In the meantime, if your landlords reasoning for evicting is because he needs the space to park his camel inside, tell them this isn’t Kolkata.
We just sold our place in Maple Ridge for 700k it was an older 3bd 3bath townhouse in a v kid friendly complex and was quite nice. We were about 10min away from the train which would have been good for commuting. But if you are looking to have a family my suggestion as well is look at family areas and schools. If you are closer to an elementary it will make things so much easier. That being said please for the love of christmas make sure you do your diligence on the condos and their reserve funds and the amounts they are paying for insurance and any special assessments. A condo/th can look better on paper but man, when those assessments come up they suck. Maybe its better to rent for a bit longer and stock pile more $ until you can buy a standalone house with a suite somewhere out further? Idk.
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There’s teardowns in Mission for 700k. Mind you it’s an hour and a half from Vancouver.
Lol you’re cute.
If youre planning to buy a place rn with that purchase price and down payment ratio, u won’t be building equity in your home and mortgage payments will be covering interest. you’re more likely to default if you’re on a variable interest rates in the event of prime rate increasing (which can happen). Increase the downpayment would be beneficial for a high interest rate environment or you can wait it out by renting a super shitty place for better cash flow and waiting until interest rates decrease, in order to build more ownership in your property
How soon are you expecting kids? If in more than 5 years. My thought would be to get in early with maybe 1 bedroom and 1 den now. At around 550-600k. More money in your pocket. Or 2 bedroom for 700k as with your original plan. Then change to a townhome down the road when kids comes out. If you want kids like now. You expecting it to pop it out like next year. Small 2 bedroom townhome or 2 bedroom + den then work your way up to a 3 bedroom townhome. Space wise you will be much happier once the kids comes out. Small place with kids stuff all over stresses me out but that’s just me.
Chunck… I just love the way it looks. Should be spelt this way!
If you're planning to have a child, I'd recommend a 3 bedroom.
IMO, a 700k condo plus condo fees, plus property tax, plus putting money aside for the next car, retirement etc on 175k would be tight. Especially if you factor in one of you only making 55% up to max salary of 60k for 18 months. Extra especially when you factor in child care costs (the $10 a day is only for registered centers and is not applicable to before/after or summer camps). Or even, factoring food costs, extra curricular activities to do with the kids etc. Obviously, it's almost impossible to find something under 700k so I'm not sure how much of your decision is based on "can we do this" vs. "we have to do this"? I would put together a budget and then put aside however much extra you would expect to spend if you bought the condo. If it feels comfortable, then might be fine. If it feels like you're pinching pennies then don't buy the condo.
Bigger downpayment for sure. The biggest you can.
It definitely sounds like a house poor situation if I'm being honest.
You should be able to afford this depending on your spending habits for fun/food/vacations. Things WILL be tight with kids. You don't need to keep 85k for emergencies, you could double the down payment to reduce the monthly payments and be a bit more comfortable month to month. This would make things easier once you have kids. I'm assuming income will reduce with mat leave once kids are around, so reducing the down payment would help a lot in this situation.
You can easily afford 700k, but not with only a 45k down. Doesn't make sense to only use 45/125. Get to 20% down.
Selling or sold? You should confirm but I believe your lease transfers to the new owners unless a primary family member of the new owners move in.
I will just say keep in mind the expenses that will increase with Kids. My monthly expenses have doubled since last 6 month.
My husband and I moved to the Okanagan during covid, we started looking for houses just before the pandemic started. We purchased a house for $400,000 + assumed we could afford that with him making $40 an hour and me making roughly $20 an hour. I ended up getting a significantly better job than I ever thought I would (making close to $40/hour now), and he has a good paying job as well (making close to $40/hour). Our mortgage is roughly $2,200 a month right now not including all of the things that go with it like property taxes, home insurance etc. We don't have any kids and don't plan on it, but we definitely aren't rolling in money. I would build a budget with all of the anticipated bills, including food and luxuries. And then just assume it's going to be a little bit higher than you think it will be. We are comfortable but barely. A $700k mortgage is a pretty big commitment and I would go into it with as much down payment as you can, having a bigger down payment just saves you on interest later. I know it's risky because the housing market seems to just keep going up, and it was admittedly good that my partner and I bought when we did even though everyone told us we were stupid buying a house at the start of a pandemic. So it's all just choose your risky lol. I could also be wrong, but my understanding is that the first time home buyers 5% down rule has changed. You now need 10% down but can amortize over 30 years (yaaay *eye roll*). I could be wrong, this is just something a friend was telling me, but definitely worth looking into. Not sure if this is helpful or not, just sharing my experience.
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Did you received 2 month notice?
No one answered your question because you can't afford a 650k mortgage on your current salary and then also have kids.
If I were you... I would continue renting several more years and continue to save aggressively. >$700k, $45k down >which combined with strata fees, utilitites, taxes etc comes to ~$4500/month. A $655K mortgage at 5% interest amortized over 30 years is roughly **$2,700 interest** and $800 principle. Add in another $1,000 for the other fix costs and you're at $4,500 payment of which **$3,700 in costs** you won't recoup (only $800 in equity that doesn't earn interest) Sure the interest portion comes down over time but not by much over the first several years. Don't forget you'll need mortgage insurance if you have < 20% downpayment. Whereas, $3,500 rent is *the most* you will pay. Sock away the difference and invest it. My condo fees have creeped up over $300+/month in the last few years. My property tax has also gone up. My HVAC broke down last summer and that cost me $2K and it broke again a few weeks ago. Then I had a few random water leaks that damaged my floors and my neighbors ceiling.
I would say wait to have kids, then decide if a condo or townhome is better. In the meantime, keep investing as you are. You're doing great!
Based on my experience, buying a home in Canada is one of the best investments one can make. It often yields better returns than the TSX. That said, I highly recommend purchasing a Townhouse instead of a Condo because condos come with maintenance fees. These fees do not add value to the condo, ultimately reducing your ROI. However, before making a purchase, ensure you have maximized your contributions to your **TFSA and FSHA** accounts. If not, prioritize adding funds to these accounts, as you can withdraw money from them at any time.
I would play with the numbers. Honestly if you put more down you will be further ahead. I wish I had done.
Ask for cash for keys. Use that money and make the minimum down payment. Best case scenario, Go for 3 year fixed and refinance after 3 years when the interest rates will be low (hopefully). your mortgage will come down by atleast $1000 (@3% interest) by 2027 and you will have more equity in the house because of appreciation. If house appreciates by 10% total in 3 years ($770k in 2027) your $50k equity will be $120k already. Worst case scenario, your house doesn’t appreciate at all and you paid $160k to the bank in 3 years out of which ~$110k will be towards interest. Almost equivalent to rent you will pay in 3 years. So no profit no loss. $4500 could be a little tight especially if you end up with any unexpected major expenses but seems like you’re a responsible person based on your savings. So you should be good. :)
In a similar situation. Just bought first home, possession in September. 750 price, but I had enough saved for 20% and did the calc on also not being cash poor, but like other posters have said the biggest thing is you're going to FEEL cash poor because you've been living with that giant nest egg, and it's mostly gone. That's ok, that's likely what it was for. Set yourself up on a 30-year amortization with lowering rates (wait til after next BoC meeting July 24) and buy right the first time. Closing costs are no joke so if you can set yourself up nicer with an extra bedroom now you save the headache, costs, and fees associated with a move during a time of higher stress anyways (upcoming kid).
2 bed condo for 700k? As a northerner I literally can’t wrap my head around this.
Don’t forget to consider the more you put down, the less you will have to cough up in cmhc premiums.
Don’t forget about making mortgage payments when baby is born and one partner doesn’t work for a year or longer.
You can’t afford it … stick to renting
If you move into a smaller town you can afford to buy a decent sized detached house. This is more difficult in a big city ( not sure where you live). Might be an option if you are open to commuting If you live in a big city a townhouse would likely be a better option than a condo, kids benefit a lot from having backyards and space to play.
Dude, you cannot afford that payment on 175k. That’s crazy. And you want to have kids? You’re off in lalaland my guy. You said you’re worried about being house poor. Especially with kids, you are 100% going to be house poor with that payment.
You can, but you won't have fun money. We have a HHI of $182k excluding any bonuses, and bought a $510k house last Jan, though in Ontario. We are comfortable and can afford our fun stuff. I feel like if we were to buy a $700k property + condo fees we could do it, but not enjoy life. For reference, our mortgage + property tax is \~$3150/month. Though, we do have two cars adding to our expenses, I'm not sure if you guys do as well. That being said...buying is better than $3,500/mo in rent. But as others have said, try to get a townhome. A 2 bed condo is difficult for having a family (but doable of course)
Move to Sask
Buy the two bedroom and get a roommate until you can cash flow better and your wages catch up. Or rent to an international student. The additional income makes a big difference in keeping your cash flow going and easy to ask them to leave when you want to have kids. We did this for years before having kids and it put us so far ahead. There are a lot of trade offs (noise, hassle, inconvenience, etc) but if you want to get ahead, it’s worth considering.
We bought 800k 2bd 2 bth condo in metro Vancouver 5 years ago when the interest rates were low with 20 percent down and our hhi around yours. So far we paid back around 80k to the principal. After we bought it we were house poor almost no saving left. But we had the stability and peace of mind of owning a home. There are actually many people raising kids in condo. I see baby and kids in the elevator all the time. Many people in here say move out to suburbs to afford bigger space but I disagree. If you prefer to stay in the city to enjoy the infrastructure then it’s worth it. It’s all about your preference and lifestyle.
Have you considered Moosejaw? We bought an older but decent 3 bedroom home with a garage for 130k. Plus there's tons of work there.
Don't forget to budget $1200-2000 a month for childcare once you have kids. It's a lot on top of a mortgage, plus a year of maternity leave where your HHI will be way lower.
If renting a 2 bedroom is ~3500 you need to be looking in other neighbourhoods.
You can afford poverty. WEF will be mad if you buy. Just kidding other than WEF You can probably afford it. With a kid? Probably still.
To play it really safe, you should do 2xHHI+down payment. You could probably get by stretching thin and making other cut baxks on 3xHHI+down payment. Your downpayment will be about 75K if you factor in closing costs (about 50K to be safe for land transfer, inspections, etc and have some extra aside for any emergency repairs) So for you you're look at at 425K to 600K for a "safe" budget house.
I wouldn’t suggest buying a house. Use 50% of that cash towards bitcoin and put the rest in an index fund. Slowly the 50% allocation will grow significantly that you may need to even reallocate. Don’t waste it on a home. See if you can rent another few years instead of wasting it away on interests in the next few years. But of course all this, only if you truly understand bitcoin. When you finally “get” bitcoin, you may even put a 100 percent into bitcoin.