The average home price in 2026 is nearly $700,000. To afford such a purchase, you need an income that most Canadians simply don’t have
More and more Canadians aged 20 to 40 are coming to the same conclusion: homeownership isn’t for them. Prices remain high, mortgage rates are far from historic lows, and everyday expenses keep eating up what, in theory, could be saved for a down payment. Let’s break down what income you actually need — and what else affects your ability to buy a home.
According to the forecast by the Canadian Real Estate Association, the average home price in the country in 2026 will be about $699,000.
The Canada Mortgage and Housing Corporation (CMHC) recommends that all housing costs — mortgage, property tax, utilities, and condo fees — should not exceed 30% of a household’s gross income.
Before thinking about a mortgage, you need to save up a down payment. When buying a home for $700,000, the down payment will be $45,000: 5% of the first $500,000 ($25,000) and 10% of the remaining $200,000 ($20,000).
The catch is that about a quarter of Canadians live paycheque to paycheque. Many don’t even have $1,000 in an emergency fund. Forty-five thousand is an unattainable amount for them.
Since the down payment is less than 20%, you’ll also have to pay CMHC default insurance — about $26,200 (4% of the $655,000 mortgage amount). It gets added to the principal, bringing the total financed amount to roughly $681,200.
At a 4.5% mortgage rate — quite realistic under current conditions — the monthly payment will be about $3,750 with a 25-year amortization or $3,450 with a 30-year amortization.
But that’s only the mortgage. On top of it come property tax ($300–$400 per month), home insurance ($100–$150), and utility bills ($200–$300).
Total: monthly housing costs range from $4,050 to $4,600.
For these costs to fit within CMHC’s recommended 30% of gross income, a household needs to earn $13,500 to $15,300 per month — that is, $162,000 to $184,000 per year. Plus have $45,000 saved for the down payment.
The median income of a Canadian household is significantly below this threshold. That’s why homeownership feels increasingly out of reach.
Income is important, but it’s not the only factor. Banks assess the borrower’s entire financial profile.
Credit history directly affects the rate: a good history gives access to better terms, a bad one shuts the door or makes the mortgage significantly more expensive. Even a half-percentage-point difference in the rate means tens of thousands of dollars in overpayment over the full term.
Location matters. Two households with the same income will have completely different experiences depending on whether they buy in Toronto or in a small town. Higher taxes, insurance, commuting costs — all of this makes a home that is “affordable on paper” in a big city significantly more expensive in practice.
Existing debts reduce your options. Student loans, car payments, credit card debt — all of this reduces the amount the bank is willing to approve. Even with sufficient income, a high debt load can be a reason for rejection.
Before you start searching for a home, it’s worth putting together a complete picture of your finances: all debts, monthly payments, current expenses, and what remains after them. When viewing options, factor in property taxes in the specific area, distance to work, and climate risks that affect insurance costs.
Working with an experienced realtor or financial advisor at the preparation stage significantly expands your options and helps you avoid unpleasant surprises after signing the contract.
