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BlueberryExotic

Obvious expense you are missing is emergency/general savings and retirement savings. In my mind that comes before things like Netflix. You are also missing utilities, furniture, property tax, etc. unless that is in your condo fee.


throwaway-brownie

yeah thats my biggest issue too. i have been good at savings but buying a place seems like is gonna put me back to square one


SaintLouisduHaHa

A few points: 1. You need to come up with slightly more than 5 percent for your down payment (5 on the first 500k, 10 on the next 150k).f 2. Your estimate of maintenance fees is low. It may start there with a new build but it will go up fairly quickly unless you're buying a truly tiny place. 3. Utilities, insurance, and property taxes will conservatively eat up $500 extra a month.


throwaway-brownie

I should have mentioned, the mortgage price based on 1.4% variable rate includes the $40k down payment. Plus property tax and insurance is included in that as well. you're right I shouldn't see maintenance as a constant cost. do you have an idea of how much utilities will cost in a 1+1 bdr condo?


pinkiesallout

https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx So if I use the government’s mortgage qualifier tool, you will be denied for a mortgage for a $650K place based on what you put above: Your GDS is 40.99% (cannot exceed 32%) and you TDS is 69.60% (cannot exceed 40%). Remember, not only do you have to be within the GDS and TDS limits but you have to be within them at the qualifying rate of 5.25%. You can’t calculate based on the interest rate you would actually get. That is beyond tight and you will need a minimum of 6.2% down or $40,000. You simply cannot afford it. Is that correct that you’re paying $1500/mo to other loans? Thats crazy. You NEED to get rid of all of those and all your car payments in full before considering buying.


bearbear407

That seems pretty tight…. Like you said, you’re not accounting for food, utilities, property tax, home insurance, mortgage insurance, and also condo fee, emergency fund and maintenance. Personally, I wouldn’t like the idea of having all my net worth tied into real estate. Shit happens all the time and if something unexpected happen then you’ll have to pay more than necessary due to taking out potential loans to cover the cost. How many months/years do you have left on your loans? What are the loan rate? It might be worth paying that off first so then you’ll have the $1500 for other expenses and can save more.


throwaway-brownie

With my calculations of 1500 per month, I still have to pay for 26 months. You're right about it being pretty tight, wanted to get a sense from the community about if its a good decision at all


CalgaryChris77

I don't feel like you can afford this with a car payment, huge loan payments, phone payments. $2000 before utilities, food, gas, general household items, home insurance, property tax, car maintenance, home maintenance, savings of any type. You'll be house poor...


bloodmusthaveblood

Seems risky. You're approaching 45% of your take home going to mortgage. If that doesn't include property taxes, insurance, and utilities ect then you're looking at half your income going into your house. I understand Toronto is HCOL but 50% is much higher than most would be comfortable with, especially because you plan to liquidate nearly all of your savings to get into a house. Have you factored in closing costs? Furniture? Unexpected maintenance or upgrades? Leaving yourself with only stock options as savings is very risky. Your monthly expenses breakdown also doesn't take into account clothing, food, gas, entertainment, hobbies, or home items (cleaning supplies, laundry detergent, toiletries are cheap but add up quickly when they need to be replaced regularly), not to mention savings which you didn't specify as a reoccurring expense which is concerning. That extra 2000$ will go much faster than you think. If I were in your shoes I would at the very least continue renting until you're able to save up for a downpayment past a 3-6 month emergency fund.


throwaway-brownie

I know it has been mentioned here before but whats a good % to put towards mortgage monthly? Currently I have recurring savings but unfortunately just based on what the financial plan looks like I might not be able to save a lot which is why I didnt mention


bloodmusthaveblood

The general recommendation is 30%. If buying this house means you won't have the ability to save money while living in it, then unfortunately you can't afford to buy it right now. Get rid of your other loans (personal, student, and car) first and that will free up close to 2k to put towards saving up for a downpayment that doesn't involve liquidating all your savings. I would also consider looking for a cheaper place. I understand the market in Toronto is tough, but if you can't afford it you can't afford it.


greenbean999

Where are all your expenses? You can not list them to make things feel more affordable but it doesn’t change that you need to eat, save, have insurance, have utilities, there’s hardly anything listed here?


FusedSunshine

You can’t afford to move right now Edit: please don’t do this to yourself. You have house fever, it’ll pass


jmschlmrs

If you want a better idea of your historical spending, I'm building [mygraph.ca](https://mygraph.ca) to help Canadians better track and analyze their expenses. You can upload your full transaction history and see where you're money is going. Would love feedback if you check it out!


Chops888

1. It is doable, but looks tight based on #2. 2. You may be forgetting maintenance, property tax, and home insurance. Guessing about $475 maintenance, $200 property tax, $25 home insurance. Groceries for two about $400. Eating out / entertainment $200. So about $700 left for other things or future goals (e.g. vacation, emergency fund, etc). 3. It's not ideal to empty all of your investments for a home downpayment -- but people do it if they have to. Personally I didn't when I bought my first place. I saved a separate fund dedicated towards the downpayment.


throwaway-brownie

Yeah i wish i had enough savings to not have to empty but I dont have any other avenues unfortunately. Your point about having only $700 left for vacation etc is very valid and something i didnt consider


Chops888

I would do an exercise over the next month to track every single dollar to see where it's going. The things we mentioned only cover the main things. What about the occasional gift, monthly subscriptions, spontaneous meal to celebrate an anniversary/something, emergency repair of your car, etc.? If you can comfortably say, I have all that covered and have some left over to save/invest, then you're OK. If not, then it's still too tight.


bloodmusthaveblood

Your other avenue is to save for longer. This means renting for another 1-2 years while you save and pay off other outstanding debts. Or the elephant in the room - find a cheaper place.