Editor's Note: This story originally appeared on Point2.
Never has the dream of becoming a homeowner in Canada felt just like that — a dream — until now.
Homeownership rates declined to a 20-year low in 2021, and potential buyers might still be inclined to postpone ownership plans due to ongoing inflation and out-of-reach home prices.
The first year of homeownership, in particular, can be daunting, given the down payment, closing costs, first mortgage payments, homeowners’ insurance, and property taxes — all new to first-time homebuyers.
Point2 set out to determine the major Canadian cities where the first year of homeownership was easier on the wallets of new buyers. To do so, we took the 50 most populous cities in Canada and analyzed data pertaining to two categories: upfront costs and annual recurring costs.
Find details on our methodology at the end. Here are the Canadian cities with the cheapest first year of homeownership in that country.
1. Saguenay, QC
- Cost of 1st Year: $74,342
- 20% Down Payment: $50,900
- Closing Costs: $3,918
- Annual Mortgage: $15,429
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,111
2. Trois-Rivières, QC
- Cost of 1st Year: $79,517
- 20% Down Payment: $54,000
- Closing Costs: $4,749
- Annual Mortgage: $16,369
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,416
3. Québec City, QC
- Cost of 1st Year: $84,370
- 20% Down Payment: $58,120
- Closing Costs: $4,728
- Annual Mortgage: $17,618
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $2,921
4. Regina, SK
- Cost of 1st Year: $88,704
- 20% Down Payment: $62,440
- Closing Costs: $2,684
- Annual Mortgage: $18,927
- Annual Homeowners’ Insurance: $1,100
- Annual Property Taxes: $3,553
5. St. John’s, NL
- Cost of 1st Year: $88,956
- 20% Down Payment: $63,260
- Closing Costs: $3,115
- Annual Mortgage: $19,176
- Annual Homeowners’ Insurance: $780
- Annual Property Taxes: $2,625
6. Lévis, QC
- Cost of 1st Year: $89,246
- 20% Down Payment: $61,800
- Closing Costs: $4,949
- Annual Mortgage: $18,733
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $2,779
7. Winnipeg, MB
- Cost of 1st Year: $95,125
- 20% Down Payment: $64,720
- Closing Costs: $5,888
- Annual Mortgage: $19,618
- Annual Homeowners’ Insurance: $1,032
- Annual Property Taxes: $3,867
8. Edmonton, AB
- Cost of 1st Year: $100,078
- 20% Down Payment: $72,000
- Closing Costs: $1,873
- Annual Mortgage: $21,825
- Annual Homeowners’ Insurance: $1,000
- Annual Property Taxes: $3,380
9. Sherbrooke, QC
- Cost of 1st Year: $100,214
- 20% Down Payment: $67,500
- Closing Costs: $7,616
- Annual Mortgage: $20,461
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,653
10. Saskatoon, SK
- Cost of 1st Year: $102,992
- 20% Down Payment: $73,200
- Closing Costs: $2,836
- Annual Mortgage: $22,189
- Annual Homeowners’ Insurance: $1,100
- Annual Property Taxes: $3,667
11. Terrebonne, QC
- Cost of 1st Year: $118,309
- 20% Down Payment: $82,200
- Closing Costs: $6,364
- Annual Mortgage: $24,917
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,844
12. Gatineau, QC
- Cost of 1st Year: $118,603
- 20% Down Payment: $81,000
- Closing Costs: $8,135
- Annual Mortgage: $24,553
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,931
13. Greater Sudbury, ON
- Cost of 1st Year: $119,472
- 20% Down Payment: $84,140
- Closing Costs: $1,888
- Annual Mortgage: $25,505
- Annual Homeowners’ Insurance: $1,250
- Annual Property Taxes: $6,689
14. Longueuil, QC
- Cost of 1st Year: $128,625
- 20% Down Payment: $87,600
- Closing Costs: $9,093
- Annual Mortgage: $26,554
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $4,394
15. Laval, QC
- Cost of 1st Year: $132,786
- 20% Down Payment: $92,798
- Closing Costs: $6,949
- Annual Mortgage: $28,129
- Annual Homeowners’ Insurance: $984
- Annual Property Taxes: $3,926
Methodology
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- For this study, we considered the 50 largest Census Subdivisions (Cities) based on the most recent population data from Statistics Canada 2021 Census of Population.
- For upfront costs, the study assumes a 20% down payment, and closing costs which include legal fees (the cost of a lawyer, title insurance, and registration fees) and Land Transfer Tax minus local rebates for first-time homebuyers. For closing costs at national level, we used an average of the 50 cities analyzed.
- In line with Canada Mortgage and Housing Corporation‘s conventional mortgage lending rate for January 2023, mortgage payments per city were calculated assuming a 5-year fixed-rate mortgage with an interest rate of 5.86% and an amortization period of 25 years.
- 2022 homeowners’ insurance was sourced from ratehub.ca (at province level).
- 2022 property taxes were comprised of the general provincial, municipal, and education portions as posted by the cities analyzed, including provincial assessment value percentages. For property tax at national level, an average of the 50 cities analyzed was used.
- The number of years needed to save to cover the cost of upfront costs as well as the full first year of homeownership was calculated based on the 50/30/20 budgeting rule stating that 20% of after-tax income should go to savings.
- For the purpose of this study, we assumed a renter household saves 20% of the average after-tax household income sourced from CMHC at metro level as of 2020; the amount was adjusted for 2022 using an annual average of the weekly earnings growth published by Statistics Canada.
- The study uses January 2023 MLS Benchmark Composite Prices for the majority of the cities included in the analysis, with the exception where we considered Median or Average Sale Prices as per local MLS monthly reports, and where we used a weighted average of the prices for each property type to determine the Composite Price. Where unavailable at city level, we looked at Local MLS Prices at regional levels.
- Not included in the study are utilities and municipal services, which one must pay regardless of owning or renting, hence not influencing homeownership costs as much as other strictly owner-related expenses.
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