Buying a home on your own is tough – especially in Toronto, one of Canada’s most expensive housing markets. 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 Toronto, a registered nurse can expect to earn an average starting salary of $45,197 per year – $3,826 per month. Compared to many other professions, this is a decent starting salary. And if you were in a situation where your student loans were paid off and you had no other major debt repayments to make, you could look into homeownership. Want to find out what a nurse can afford to buy in Toronto? Let’s take a look.
After running the numbers with our mortgage affordability calculator, a nurse earning $3,826 per month could afford a home priced at $298,538. This figure is calculated with a down payment of 20% ($60,012), an amortization period of 25 years and a 5-year fixed mortgage rate of 2.89%. 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 in more detail on our site. For now, know that $298,538 doesn’t buy much in a pricey city like Toronto, but that doesn’t mean you’re out of the market.
Property #1: Downtown Condo
Location: 4 Spadina Avenue
Asking Price: $269,900
Features: 1 Bed, 1 Bath
Approximate Square Footage: 499
Property Taxes: $1,326.46/year ($110.54/month)
Maintenance Fees: $226.15/month
Parking Spaces: 0
Located near Spadina and Front, you could move into a condo steps away from the hustle and bustle of the downtown core. If you were able to snag this condo at its asking price and put down 20 per cent ($53,980), and you obtained a 5-year fixed rate of 2.89 per cent and amortized over 25 years, your monthly mortgage payment would be just $1,010. Add in the monthly property taxes ($110.54) and maintenance fees ($226.15) and only $1,346.69 of your income would be going towards housing each month. Not bad for downtown living!
Property #2: Suburban Townhouse
Location: 1720 Albion Road
Asking Price: $288,999
Features: 3 Bed, 3 Bath
Approximate Square Footage: 1,500
Property Taxes: $1,320/year ($110/month)
Maintenance Fees: $341/month
Parking Spaces: 1
If you prefer to live in a more spacious home in the suburbs, this starter townhouse features a beautifully kept courtyard that you can escape to after a long week of shift work. If you made a 20 per cent down payment ($57,800), got a 5-year fixed rate of 2.89 per cent and amortized over 25 years, your monthly mortgage payment would be just $1,081. Add in the monthly property taxes ($110) and maintenance fees ($341) and you could pay only $1,532/month to own a home just 30 minutes outside of the city.
In the end, the home you choose to live in depends on both personal preferences and priorities. If you don’t mind commuting, you can get a lot more home for your money. But if you want to be within walking distance to all of your amenities, it is possible for a nurse to purchase a condo in downtown Toronto.