Quote:
Originally Posted by h0twired
So you either buy a renovated inner city Winnipeg home for $250k or buy the same place $650k home in Calgary and you still come out ahead in Calgary.
$50k per year goes a long way when you dedicate it to your mortgage.
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I am not talking about people moving back to live mortgage free, I am talking about people entering the market.
I don't know anyone who is disciplined enough to dedicate the "extra" $50k of their gross take home salary to house payments. Not withstanding the fact that that extra money would probably be better off invested in other areas than property...
Looking a little more closely at the mortgage costs.
To purchase a house at 650k, assuming a 5% interest rate for 25 years, and monthly payments, it will end up costing you nearly $485k in interest charges, and a monthly payment of almost $3780(!!). (Let's not even talk about the significant down payment required, that you will likely need to finance too).
A house at $250k will cost you $186k in interest with a monthly payment of $1450. The cheaper house also affords the ability to put a substantial down payment.
That is a difference of just about 300k simply in interest charges (that is
throw-away NET not GROSS salary money), and requires an extra net income devoted ONLY to mortgage of approx. $2380 a month .
The point I am trying to make, is that home ownership in Calgary for a young couple/person just starting out is a VERY daunting undertaking, especially if they want a house.
Most people posting in this thread seem to have moved out west when home prices were far lower, and have since benefited from the large increases in property values.
If you are moving in to Alberta now, or graduating now, or entering the market now, the above stats are your reality if you want to live like you could live if you "stayed home".