Recently, Roy Nakhal, mortgage broker at Multi-Prêts, was interviewed on The Andrew Carter Morning Show to address a question that concerns many buyers: what income is actually required to become a homeowner in Montreal today?
A simple rule to estimate your borrowing capacity
On Andrew Carter’s microphone, Roy recalled a basic rule often used to estimate borrowing capacity: “In general, for a first-time buyer, you can estimate that a mortgage represents about four times your gross annual income.” Thus, someone earning $80,000 per year could, as an indication, qualify for a mortgage of about $320,000. Of course, this estimate can vary depending on several factors: existing debts, the down payment, current interest rates, and the debt ratios required by financial institutions.
Roy also noted that, despite some recent stabilization in the market, access to homeownership remains a challenge, particularly for first-time buyers.
The growing role of parents
Another notable point from the interview was the increasing involvement of parents in their children’s real estate projects. “We are seeing more and more parents attending initial meetings to establish a strategy and see how they can help their children access homeownership.” This assistance can take different forms: a gift for the down payment, co-signing a mortgage, or support with financial planning. This intergenerational collaboration is becoming, for many families, an important lever in making a first home purchase possible.
How much should you budget for a down payment?
Roy reminded that in Canada, the minimum down payment starts at 5% of the purchase price for a property priced at $500,000 or less. Beyond the minimum required amount, it is also essential to budget for related costs such as land transfer tax, notary fees, inspection costs, moving expenses, and other transaction-related expenses. Realistic planning helps avoid surprises when finalizing a purchase.
Focusing on strategy
Finally, Roy highlighted the importance of government programs, particularly the First Home Savings Account (FHSA), which can help buyers accumulate a down payment more quickly thanks to its tax advantages.
In a context where affordability remains a major concern, planning is key. A personalized analysis with a mortgage broker makes it possible to establish a clear, realistic plan tailored to each individual situation.