It helps to be a couple when saving for a home in Kamloops, Kelowna
While the dream of home ownership includes the reality of at least a 5% down payment, the reality is that an affordable mortgage requires much more than that for the average earner.
In fact, saving enough to have an affordable mortgage (costing 30% of household income) even on a starter home could take decades.
“Whether they’re single or a couple, covering the difference between the home price and the mortgage is an incredible financial effort,” said a news release from real estate research portal Point2.
“It’s a lengthy one, as well. It would take years upon long years to save enough to buy a home, so home seekers could rightfully start feeling like homeownership is not an attainable goal.”
For single individuals saving 20% of their monthly income to put towards a mortgage could take 52.5 years if they’re in the Vancouver market.
The national average for a single person is 28 years, eight months but only a fraction of that (three years, 9 months) for a couple. That’s because couples not only save more money faster but they can afford higher mortgage payments.
And this is just for starter homes, priced at half the benchmark price for all homes in a market.
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Point2 calculated that a starter home in Kelowna costs $391,363.
A couple could afford $320,097 for an affordable mortgage. With a 20% ($78,273) down payment, Point2 estimates it would take four years and two months for a couple to save.
An average single person would only be able to afford a $127,781 mortgage, so would need a 67.3% down payment ($263,582). On an average income, that would take 31 years.
The situation is not as grim in Kamloops but is still no laughing matter.
A starter home in Kamloops comes in at $293,595 and a couple could afford to mortgage all of it. But, since down payments are required, Point2 says it would take three years and one month for a couple to save a 20% down payment of $58,719.
It's a much different world for a single income earner who could only afford a mortgage of $128,082. That means they would take 19 years and three months to save for a $165,513 down payment (56.4%).
See the full Point2 report here.
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