What Will a Mortgage Cost in These Major Markets?

by Jordan Lavin July 16, 2018 / No Comments

The Spring housing market is coming to a close, which means one of the best times to buy a home is right around the corner. Things settle down for the summer after the flurry of activity in May and June, leaving buyers more time to make decisions and bringing house prices down moderately before the Fall market picks up in September.

If you’re thinking about buying a home this summer, you may be wondering what a mortgage will cost. In addition to your down payment, the deciding factors are the purchase price and mortgage rate. Since these all vary depending on location, let’s look at what it will cost to buy a home in six major markets across Canada.

Each of these examples takes the most recent real estate sales stats and local mortgage rates. It also assumes a new mortgage amortized over 25 years with monthly payments, and the market’s best 5-year fixed rates. While the numbers provided here can give a general view, a mortgage calculator can help you get a better idea of mortgage payments given your individual situation.

Vancouver

In the lower mainland, the average house price in May 2018 was $1,094,000. And even though the average price was up 11.5% over last year, there were almost 20% fewer sales than in the average month of May over the last 10 years. Only 2,833 homes were sold while 6,375 were listed, suggesting that even Vancouver is now firmly in a buyer’s market. But that hasn’t had a significant effect on prices yet; Vancouver real estate is still the most expensive in the country by far.

Fortunately, BC mortgage rates are still very low in relation to historical average. In Vancouver, the average condo sold for $702,000. With the minimum down payment of $45,200 and today’s best 5-year fixed mortgage rate of 3.09%, your total mortgage payment including insurance would be $3,264 per month.

With a 20% down payment of $140,400 and today’s best 5-year fixed mortgage rate for uninsured mortgages of 3.24%, your mortgage for a Vancouver condo would cost $2,727 per month.

For a detached house, the average price is $1,605,800. Because insured mortgages aren’t available for purchase prices over $1-million, the minimum down payment is $321,160. The best 5-year fixed mortgage rate in Vancouver for a home over $1-million is 3.39%, so the mortgage on an average detached home will cost you $6,348 per month.

Condo Detached
Purchase price $701,000 $1,608,000
Down payment Minimum 20% Minimum 20%
Down payment $45,200 $140,400 $321,600 $321,600
Mortgage rate 3.09% 3.24% 3.39% 3.39%
Monthly payment $3,260 $2,727 $6,348 $6,348

 

Calgary

While the economic recovery is well underway in Calgary, the housing market is still chilly with sales falling 24% below long-term averages. Higher mortgage rates and the new mortgage stress test are thought to be contributing to the slow pace of sales in the city. Home prices in Calgary haven’t changed much since 2014 when the market stopped its rapid rise.

In the first three months of 2018 the median price for a Calgary condo was $254,750, equaling mortgage payments of $1,203 per month with a 5% down payment and $1,000 even with 20% down.

In the same time frame the median price for a detached home in Calgary was $479,000, just sneaking in under the maximum purchase price to buy with a 5% down payment. The minimum down payment of $23,950 will get you a monthly mortgage payment of $2,262 and a 20% down payment will lower it to $1,881.

Condo Detached
Purchase price $254,750 $479,000
Down payment Minimum 20% Minimum 20%
Down payment $12,738 $50,950 $23,950 $95,800
Mortgage rate 3.09% 3.34% 3.09% 3.34%
Monthly payment $1,203 $1,000 $2,262 $1,881

 

Edmonton

Home prices in Edmonton remain relatively flat, and the average home price in the city is $377,139. Edmonton, too, is a buyer’s market, with the average home taking 53 days to sell.

An average Edmonton condo sold for $241,571 in May 2018. With a minimum down payment of $12,079 and Edmonton’s best mortgage rate of 3.09%, the monthly payment on a condo in the city will cost $1,141. With a 20% down payment, the best available mortgage rate is 3.34% and the mortgage payment calculator shows your payment will be $949.

Detached home prices in Edmonton averaged $442,348 in May. A mortgage with 5% down will cost $2,089 per month, while a 20% down payment will lower your payment to $1,737.

Condo Detached
Purchase price $241,571 $442,348
Down payment Minimum 20% Minimum 20%
Down payment $12,079 $48,314 $22,117 $88,470
Mortgage rate 3.09% 3.34% 3.09% 3.34%
Monthly payment $1,141 $949 $2,089 $1,737

 

Winnipeg

May 2017 was the best May in history for Winnipeg home sales, but the trend didn’t continue into 2018. Winnipeg followed the rest of the country with home sales falling 11% year over year. But the pace of sales is still strong in Winnipeg, with detached homes selling in less than 4 weeks on average.

Sale prices for condos weren’t available, but Winnipeg is one of the most affordable cities in the country for detached housing. A detached home in Winnipeg sold for a median price of $295,000 in the first quarter of 2018.

With a 5% down payment of $14,750 and Winnipeg’s best rate for insured mortgages of 3.09%, the mortgage on a detached home will cost $1,393. A 20% down payment bumps the mortgage rate slightly to 3.24%, but lowers the monthly payment to $1,143.

Detached
Purchase price $295,000
Down payment Minimum 20%
Down payment $14,750 $59,000
Mortgage rate 3.09% 3.24%
Monthly payment $1,393 $1,143

 

Toronto

The Toronto housing market waited longer than Vancouver to end its wild ride, and it’s one of a few exceptions to the country-wide trend of supply outpacing demand. Sales were down 22.2% compared with last May, but new listings were down by 26.2% keeping some pressure on prices and keeping buyers on their toes.

In May, the average Toronto condo price was $500,000. With a minimum down payment of $25,000 and a mortgage rate of 3.09%, a Toronto condo will cost $2,361 in monthly mortgage payments. A 20% down payment of $100,000 will increase your mortgage rate to 3.24% but reduces that payment to $1,943.

Detached homes in Toronto no longer average over the million-dollar mark, but they’re second in value only to Vancouver, coming in at an average of $849,000 in May.

Because the average Toronto house price is over the $500,000 maximum for a 5% down payment, the minimum down payment is 5% of the first $500,000 and 10% of the remaining value. With a purchase price of $849,000, the minimum down payment is $59,900.

With the minimum down payment, your Toronto house will cost $3,922 per month in mortgage payments. A 20% down payment will lower your payment to $3,299.

Condo Detached
Purchase price $500,000 $849,000
Down payment Minimum 20% Minimum 20%
Down payment $25,000 $100,000 $59,900 $169,800
Mortgage rate 3.09% 3.24% 3.09% 3.24%
Monthly payment $2,361 $1,943 $3,922 $3,299

 

Montreal

Montreal’s South Shore led the market with a 12% increase in sales in May and Laval saw a modest increase of 4%, while sales in the rest of the city kept the same pace as last year. The pace of sales was propped up by the condo market, which were up by 14%. Sales of detached houses decreased for the first time in 5 months.

The jump in condo sales, coupled with a decrease in new listings, caused a sharp drop in inventory. Condo inventory fell by 22% in May, the largest decrease in 15 years. The increase in demand and decrease in supply is helping keep condo prices high, although Montreal real estate is still fairly affordable relative to the rest of the country.

Montreal is the only market in this article where the best mortgage rate in Canada of 3.09% isn’t available. Mortgage rates for insured mortgages here start at 3.14% and the best rate for uninsured mortgages is currently 3.39%, which is the highest in the country for a home under $1-million.

Fortunately, Montreal’s affordable house prices mitigate the effect of higher mortgage rates. The average sale price for a Condo was $257,700 in May. With a minimum down payment of $12,850, a mortgage will cost $1,220 per month. With a 20% down payment, a Montreal condo will cost only $1,015 per month.

In Montreal, there’s not a significant premium for a detached home, with the average price in May coming in at $325,000. A 20% down payment of $65,000 will allow you to buy an average house for a monthly payment of $1,283. That’s less than $300 more than the monthly payment on a condo, and only requires an extra $14,000 for the down payment.

Condo Detached
Purchase price $257,000 $325,000
Down payment Minimum 20% Minimum 20%
Down payment $12,850 $51,400 $16,250 $65,000
Mortgage rate 3.14% 3.39% 3.14% 3.39%
Monthly payment $1,220 $1,015 $1,543 $1,283

Source: CREA, GMREB

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