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How Much Do You Need to Earn to Buy Real Estate in Montreal?

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From new mortgage requirements to shifting market conditions, affordability is a hot topic in Montreal’s real estate market. But what do condos and houses actually cost in 2017, and how much do you need to earn to be able to buy them?  How Much Do You Need to Earn to Buy Real Estate in Montreal?

According to Centris statistics, these are the average prices on Montreal Island for various property types as of November 2017:

Single family homes: $455,000
Condos: $300,000
‘Plex: $518,000

(Of course, the average prices will vary based on location: some neighbourhoods are appealing for first time buyers because of their affordability, while other neighbourhoods and boroughs are appealing to investors because of their above-average appreciation rates.)

To calculate an estimated gross income required, we looked at average purchase price, along with a 2.89% interest rate, a 20% downpayment on a 25 year term, estimated property taxes, and a minimum of $100 a month for heating (other utilities are not considered by banks when issuing a pre-approval).

Then, we considered that banks require that no more than 32% of your income should contribute towards your housing costs. Keep in mind that other debts incurred, such as car loans, student loans, and credit card debt, will impact your debt-to-income ratio and my limit your ability to qualify for a mortgage.

So, without further ado, here is the minimum salary your household would need to earn, to buy real estate in Montreal:

Single Family Homes:

Based on the average price of: $455,000

  • Mortgage required: $364,000
  • Monthly mortgage payment:$1,702
  • Monthly property tax: $360
  • Total monthly housing expenses: $2,357
  • Family income required: $76,016
  • Median family income: $75,010

What should you do if you would like to buy a single family home, but earn less than $76,016?

Condos:

Based on the average price of : $300,000

  • Mortgage required: $240,000
  • Monthly mortgage payment:$1,122
  • Monthly property tax: $238
  • Total monthly housing expenses: $1,655
  • Family income required: $50,247
  • Median family income: $75,010

What should you do if you would like to buy a condo, but earn less than $50,247?

‘Plexes:

Based on the average price of: $518,000

  • Mortgage required: $414,400
  • Monthly mortgage payment: $1,938
  • Monthly property tax: $410
  • Total monthly housing expenses: $2,643
  • Family income required: $86,493
  • Median family income: $75,010

What should you do if you would like to buy a plex, but earn less than $86,493?

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