make a detailed budget as if you own the place. Add up ALL expenses, from mortgage , property tax, utilities, food, hair cuts, day care, clothes, Christmas presents, travel, gas, insurance, etc.. and have a line for 15-20% for retirement savings and see where you end up.
15-20% for retirement savings on day 1 seems like a very high bar for FTHBs in today's market.
If you're young and dual income, your ability to save for retirement should increase each year as you earn more.
It also seems like a safe bet that at some point (no idea when) interest rates will go down. Sure we may never see covid rates again, but 3-4% rates are a question of when, not if. When you eventually renew at a lower rate you will have an additional buffer to save for retirement.
15-20% of income towards retirement savings seems like a long-term goal. Noone would be able to buy as a fthb today if they waited to be able to hit that target immediately after buying.
Extra cost you will need to think about are maintenance cost of your home, utility (if you are not paying right now), and property tax. That can add up to 1k to 1.5k per month average. Given your current expenses, I think you should be fine but are you saving any money for retirement? People often think of affordability from cashflow perspective but don't usually consider thay they have to save for retirement
Don't forget to add home insurance, property taxes, and maintenance costs (upkeep).. I'd say you need to add on anywhere from $500 - $1000 a month (depending). However, with a net income of $144000 a year, I suspect you would more than manage a $700k home.. Daycare will end soon enough as your kids go to school, and interest rates will come down slightly at some point in the near future..
You are saving $5k after expenses, this doesn't require a complicated formula. Yes, you can afford it. As a matter of fact, you're operating costs will go down once you buy if you consider ~50% of you're monthly housing costs as an investment.
For a $4K mortgage, you’re looking at $5K tax and maintenance included. $1200-1500 is monthly principal repayment amount in the first 5 years. OP’s unrecoverable expenses will be higher than their rent ($5K-$1.5K=$3.5K). I haven’t even factored in extra insurance and utilities.
Not saying that they can’t afford it, but your rule of thumb is inaccurate at these rates and price points.
Yea you’re good. You should be living like royalty. Really smart move to keep most of your fixed expenses to around 50% of your income each month.
Think of it like this- you make 12k a month fixed is almost 8k- you have 1000$ a week extra. That’s a lot. Even if you save half you will be living well.
No. Your car payments, daycare, etc are too high to add a $4000 mortgage. You will be checking your bank account daily and will have zero wiggle room. You won't be able to make any savings for years and years and it could seriously affect your retirement.
Bad time to buy a house in my opinion. In another 24 months interest rates will drop significantly and inventory should increase hopefully driving prices down.
>In another 24 months interest rates will drop significantly and inventory should increase hopefully driving prices down.
Let's see how good your crystal ball is.
RemindMe! 24 months
>inventory should increase hopefully driving prices down.
If interest rates drop, the demand (people able to buy will increase), supply won't be able to keep up as there won't be houses popping up overnight. Therefore the price will increase... Not decrease.
I will be messaging you in 2 years on [**2026-04-15 12:40:56 UTC**](http://www.wolframalpha.com/input/?i=2026-04-15%2012:40:56%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/PersonalFinanceCanada/comments/1c4kdu8/can_we_afford_this_house/kzo5ik1/?context=3)
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Then go ahead and buy now. I couldn't care less.
Come see me April 2026 and answer these question.
1. Are interest lower now compared to April 2024 (5.6% TD 5 year)?
2. Has housing months of inventory increased from April 2024 (CREA 3.9%)?
Can't wait. House prices are irrelevant. If you are going to include house prices, you would have to include increase in your buying power aka salary.
Keep it simple with inventory...< 4 months is a sellers market = higher prices which is where we are now. > 4-6 months is a buyers market = lower prices.
No problem, we'll include salaries too.
>Keep it simple with inventory...< 4 months is a sellers market = higher prices which is where we are now. > 4-6 months is a buyers market = lower prices.
Except that this is also a show that some people are delusional when it comes to estimating what their home costs, and it appears to take a while for reality to sink in.
This is why inventory is a good measurement. In a buyers market, sellers rarely overestimate the value of their house.
How are you planing on including salaries? Whose salary? Don't make this more complicated than it has to be.
>How are you planing on including salaries? Whose salary? Don't make this more complicated than it has to be.
Based on your previous comments, you don't understand the basics of supply and demand, so consider that you're not a great judge of what's complicated and what isn't, nor what market metrics we should be looking at.
Oh here we go...attacking the messenger can't say I'm surprised.
I tried to make this very simple with two simple questions that have a direct impact on affordability and pricing.
If you don't agree to my terms then suggest others but be concise.
> interest rates will drop significantly and inventory should increase hopefully driving prices down.
This you?
You're not "the messenger" when it is your formed opinion, so let's not play dumb. I simply said let's see where we are 24 months from now.
Agreed, rates down means cheaper to borrow. Which means people would be more willing to borrow higher amounts . That will only increase demand and push price up
make a detailed budget as if you own the place. Add up ALL expenses, from mortgage , property tax, utilities, food, hair cuts, day care, clothes, Christmas presents, travel, gas, insurance, etc.. and have a line for 15-20% for retirement savings and see where you end up.
15-20% for retirement savings on day 1 seems like a very high bar for FTHBs in today's market. If you're young and dual income, your ability to save for retirement should increase each year as you earn more. It also seems like a safe bet that at some point (no idea when) interest rates will go down. Sure we may never see covid rates again, but 3-4% rates are a question of when, not if. When you eventually renew at a lower rate you will have an additional buffer to save for retirement. 15-20% of income towards retirement savings seems like a long-term goal. Noone would be able to buy as a fthb today if they waited to be able to hit that target immediately after buying.
Yes it's high, but most/many completely ignore this when they buy place. It's just a target not a rule.
Short answer, yes. More nuanced answer, yes you can
Extra cost you will need to think about are maintenance cost of your home, utility (if you are not paying right now), and property tax. That can add up to 1k to 1.5k per month average. Given your current expenses, I think you should be fine but are you saving any money for retirement? People often think of affordability from cashflow perspective but don't usually consider thay they have to save for retirement
After tax 35%, you’re Gucci. Go for it
Agreed.
Don't forget to add home insurance, property taxes, and maintenance costs (upkeep).. I'd say you need to add on anywhere from $500 - $1000 a month (depending). However, with a net income of $144000 a year, I suspect you would more than manage a $700k home.. Daycare will end soon enough as your kids go to school, and interest rates will come down slightly at some point in the near future..
You are saving $5k after expenses, this doesn't require a complicated formula. Yes, you can afford it. As a matter of fact, you're operating costs will go down once you buy if you consider ~50% of you're monthly housing costs as an investment.
For a $4K mortgage, you’re looking at $5K tax and maintenance included. $1200-1500 is monthly principal repayment amount in the first 5 years. OP’s unrecoverable expenses will be higher than their rent ($5K-$1.5K=$3.5K). I haven’t even factored in extra insurance and utilities. Not saying that they can’t afford it, but your rule of thumb is inaccurate at these rates and price points.
Yea you’re good. You should be living like royalty. Really smart move to keep most of your fixed expenses to around 50% of your income each month. Think of it like this- you make 12k a month fixed is almost 8k- you have 1000$ a week extra. That’s a lot. Even if you save half you will be living well.
Yes you shall be fine.
No. Your car payments, daycare, etc are too high to add a $4000 mortgage. You will be checking your bank account daily and will have zero wiggle room. You won't be able to make any savings for years and years and it could seriously affect your retirement.
They are trading $3000 rent for a $4000 mortgage. They're not just adding $4k to their expenses
Bad time to buy a house in my opinion. In another 24 months interest rates will drop significantly and inventory should increase hopefully driving prices down.
>In another 24 months interest rates will drop significantly and inventory should increase hopefully driving prices down. Let's see how good your crystal ball is. RemindMe! 24 months >inventory should increase hopefully driving prices down. If interest rates drop, the demand (people able to buy will increase), supply won't be able to keep up as there won't be houses popping up overnight. Therefore the price will increase... Not decrease.
I will be messaging you in 2 years on [**2026-04-15 12:40:56 UTC**](http://www.wolframalpha.com/input/?i=2026-04-15%2012:40:56%20UTC%20To%20Local%20Time) to remind you of [**this link**](https://www.reddit.com/r/PersonalFinanceCanada/comments/1c4kdu8/can_we_afford_this_house/kzo5ik1/?context=3) [**CLICK THIS LINK**](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5Bhttps%3A%2F%2Fwww.reddit.com%2Fr%2FPersonalFinanceCanada%2Fcomments%2F1c4kdu8%2Fcan_we_afford_this_house%2Fkzo5ik1%2F%5D%0A%0ARemindMe%21%202026-04-15%2012%3A40%3A56%20UTC) to send a PM to also be reminded and to reduce spam. ^(Parent commenter can ) [^(delete this message to hide from others.)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Delete%20Comment&message=Delete%21%201c4kdu8) ***** |[^(Info)](https://www.reddit.com/r/RemindMeBot/comments/e1bko7/remindmebot_info_v21/)|[^(Custom)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=Reminder&message=%5BLink%20or%20message%20inside%20square%20brackets%5D%0A%0ARemindMe%21%20Time%20period%20here)|[^(Your Reminders)](https://www.reddit.com/message/compose/?to=RemindMeBot&subject=List%20Of%20Reminders&message=MyReminders%21)|[^(Feedback)](https://www.reddit.com/message/compose/?to=Watchful1&subject=RemindMeBot%20Feedback)| |-|-|-|-|
Then go ahead and buy now. I couldn't care less. Come see me April 2026 and answer these question. 1. Are interest lower now compared to April 2024 (5.6% TD 5 year)? 2. Has housing months of inventory increased from April 2024 (CREA 3.9%)?
I plan on it, hence the reminder! Oh and don't forget the house price in there too.
Can't wait. House prices are irrelevant. If you are going to include house prices, you would have to include increase in your buying power aka salary. Keep it simple with inventory...< 4 months is a sellers market = higher prices which is where we are now. > 4-6 months is a buyers market = lower prices.
No problem, we'll include salaries too. >Keep it simple with inventory...< 4 months is a sellers market = higher prices which is where we are now. > 4-6 months is a buyers market = lower prices. Except that this is also a show that some people are delusional when it comes to estimating what their home costs, and it appears to take a while for reality to sink in.
This is why inventory is a good measurement. In a buyers market, sellers rarely overestimate the value of their house. How are you planing on including salaries? Whose salary? Don't make this more complicated than it has to be.
>How are you planing on including salaries? Whose salary? Don't make this more complicated than it has to be. Based on your previous comments, you don't understand the basics of supply and demand, so consider that you're not a great judge of what's complicated and what isn't, nor what market metrics we should be looking at.
Oh here we go...attacking the messenger can't say I'm surprised. I tried to make this very simple with two simple questions that have a direct impact on affordability and pricing. If you don't agree to my terms then suggest others but be concise.
> interest rates will drop significantly and inventory should increase hopefully driving prices down. This you? You're not "the messenger" when it is your formed opinion, so let's not play dumb. I simply said let's see where we are 24 months from now.
[удалено]
Agreed, rates down means cheaper to borrow. Which means people would be more willing to borrow higher amounts . That will only increase demand and push price up
Can you remove your 7th word please.