You’re determined to buy a home in Toronto with a million-dollar budget:
At Fox Marin Associates, we often receive the question: Can you buy a home in Toronto with a million-dollar budget?
The answer is complex, as it depends on several factors.
Firstly, finding a small starter home in an up-and-coming area such as Danforth East, Corso Italia, or Wallace Emerson within a million-dollar budget is possible. However, these properties may require repairs and renovations, adding additional costs. Generally, you’re looking at a small bungalow, a two-bedroom home or something that needs some elbow grease!
On the other hand, Toronto’s housing market is notorious for its supply issues and population growth, leading to continuously rising prices. Consequently, a million dollars may not get you too far in the city’s market, and you may need to compromise on the property’s location, size, or condition if you can find anything at all.
It’s worth noting that there have been 278 freehold sales under a million dollars in the Greater Toronto Area year-to-date (03-02-2023). But remember, once you cross the one-million-dollar threshold, your downpayment requirement goes up to 20%. So this means you’ll need at least $200,000 for a downpayment to purchase a one-million-dollar home.
While a 20% downpayment may seem daunting, it can significantly benefit the borrower. Just think about it! A larger downpayment can help reduce the overall interest cost of the loan, and lower monthly mortgage payments make lifestyle decisions easier. Furthermore, some lenders may offer a lower downpayment option for borrowers with excellent credit and a solid financial history.
So, how do people have a million-dollar budget for a Toronto home anyways?
Move-up buyers may have the financial resources to make a 20% downpayment on a million-dollar home in Toronto. These individuals or families generally sell their current condominium or house and use the sale’s equity to purchase a higher-value property. Additionally, some may have received financial assistance from family members to cover the downpayment and closing costs. Parents assisting with a downpayment is more common than you would think! We’ve seen many parents acquire a house in all cash for their children (we’re secretly envious, too, BTW)!
