What Can a Doctor Afford to Buy in Vancouver?

by RateHub.ca August 28, 2013 / No Comments

Flickr: mercyhealth

Buying a home on your own isn’t easy – especially in Vancouver, Canada’s most expensive housing market. In this blog series, we’re going to look at the average starting salary of a profession, assume the buyer has no major debts and calculate what they could afford to buy in the city.

In Vancouver, the average salary of a family doctor is $240,356. Doctors, however, also have to pay their own overhead expenses, which can total up to 40% of this figure. For this post, we will assume that an average family doctor has overhead expenses equal to 30% of their salary ($72,107), leading to a true annual salary of $168,249 ($240,356 – $72,107) – $14,020.75 per month. Compared to most professions, this is a great salary. And if you are earning this salary and don’t have any major debts, you can definitely afford to buy your own home. Want to see what a doctor can afford to buy in Vancouver? Let’s take a look.

After running the numbers through our mortgage affordability calculator, a doctor earning $14,021 per month could afford a home priced at $1,273,377. This figure is calculated with a 20% down payment ($259,630), an amortization period of 25 years and a 5-year fixed mortgage rate of 3.18%. Your maximum affordability is determined using your income and expenses. Lenders run your numbers through two debt service ratios – the gross debt service ratio (GDS) and the total debt service ratio (TDS) – both of which are explained on our site. For now, know that a doctor has a lot of buying options in Vancouver.

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Property #1: Downtown Condo
Location: 833 Homer Street
Asking Price: $1,265,000
Features: 2 Bed, 3 Bath
Approximate Square Footage: 1,350
Property Taxes: $569
Maintenance Fees: $485.76
Parking Spaces: 1

This beautiful condo is located in the heart of downtown Vancouver. If you were to run this condo through our British Columbia mortgage payment calculator using a 20% down payment ($253,000), a 5-year fixed mortgage rate of 3.18% and an amortization period of 25 years, your monthly mortgage payment would be $4,883. When you add in other costs, such as monthly property taxes ($569) and maintenance fees ($485.76), $5,937.76 of your income would go towards housing each month.

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Property #2: Suburban House
Location: 3288 St. Annes Drive
Asking Price: $1,239,000
Features: 4 Bed, 3 Bath
Approximate Square Footage: 2,941
Property Taxes: $558
Parking Spaces: 1

If you would prefer to live in a spacious detached home, this suburban home in North Vancouver could be right for you. Using the calculator once again with a 20% down payment ($247,800), a 5-year fixed mortgage rate of 3.18% and an amortization period of 25 years, your monthly mortgage payment would be $4,783. Factor in the monthly property taxes, which are $558/month, and you would be paying $5,341 for a home that is only a 20-minute commute to the downtown core.

When preparing to buy a home, you often have to balance what you want with how much you can afford. For most people, this involves making concessions and prioritizing the features they want. One common concession is moving outside of the city in order to purchase a larger home. If you are willing to commute, it could be a sacrifice worth making. However, if you want to be within walking distance to work, a condo in downtown Vancouver might be the better option for you.