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How Long Does It Take To Save For A Down Payment?

Penelope Graham

Feb 27, 2020 3 min read

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This article is guest-written by Penelope Graham, Zoocasa

Canada may be a vast nation geographically, with as many varying local communities and economies as it has terrain. However, one key issue never fails to unite Canadians, regardless of which province they dwell in: decreasing affordability in the housing market, as home price growth has regularly outpaced that of incomes. And home prices aren’t looking to slow down any time soon. According to the Canada Mortgage and Housing Corporation, the Crown agency that provides home buyers with mortgage default insurance and monitors the overall health of mortgage credit, the average home price is set for an upward trajectory this year, to rise between 5.6 – 6.7% to a range between $506,200 and $531,000. 

However, that’s a forecast made at a macro level, averaging home prices in markets across the nation, while local real estate prices vary widely depending on the city or town. For example, a Torontonian home buyer would be looking at an average price tag of at least $800,000 to purchase a home in the 416, compared to Prairie markets where homes remain below the $300,000 in many cases.

Savings Timelines Differ in Markets Across Canada

With this in mind, how long would it take for households across the nation to save up for the required down payment to purchase a home? According to data from Zoocasa, which compiled and assessed median incomes and benchmark home prices in 15 cities coast to coast, a home buyer earning an income within the top 50% in their city would be able to afford a typical home in eight markets, and would be able to save up for the required down payment in less than a decade.

However, that means this isn’t feasible in the seven remaining markets; there, not only would a median-income earning home buyer not qualify for a mortgage large enough to fund their home purchase, they’d be saving for decades to come up with the remaining amount, assuming they set aside 20% of their annual earnings each year.

To determine the extent of affordability for median-income households, Zoocasa calculated the maximum mortgage they’d qualify for in each region, assuming a 3% interest rate, 25-year amortization, and that the equivalent of 1% of the total home purchase price would be put toward annual property taxes. An additional $100 per month for heating costs was also factored into the calculation.

Prairie Markets Offer Greatest Affordability

Not surprisingly, home buyers on a median income would see their money go farthest in a Prairie or east coast city such as Regina, Saskatoon, Winnipeg, Halifax-Dartmouth, Edmonton, and Calgary, which account for the six most affordable markets. Not only would their incomes be sufficient to qualify for a large enough mortgage, but they’d be able to set aside the required down payment funds in under a year.

Median-Income Earners Priced Out of Canada’s Biggest Cities

However, if you’re a home buyer earning the median looking to buy homes for sale in Toronto or Vancouver, you’d be effectively priced out of those markets altogether.

For example, in the west coast city, which has long held the distinction of being the nation’s most expensive, a benchmark home costs $993,300, while a median-income household only brings in $72,662. That would qualify such a buyer for a mortgage of just $241,994, leaving a shortfall of $751,306 – an amount that would take 52 years to save for! Likewise, Toronto real estate prices remain too steep for those in the top 50% - a benchmark home fetches $802,400, while the median income in the city is $78,373. They’d qualify for a mortgage of just $300,174, and would face a timeline of 32 years to come up with the remaining $502,226.

Penelope Graham is the Managing Editor at Zoocasa, a full-service brokerage that offers advanced online search tools to empower Canadians with the data and expertise they need to make more successful real estate decisions. View real estate listings on or download our free iOS app.

Penelope Graham
Penelope Graham
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Penelope Graham is the managing editor at Zoocasa, a leading real estate resource that offers full brokerage service and online tools to empower Canadians to make great real estate decisions. Penelope is passionate about finance and the real estate market in Canada.