One of the most important matters that many home buyers struggle with is maintaining a monthly payment that doesn’t take a huge chunk out of their income. In booming cities like Calgary, the line between home price and income rate are getting wider and wider as home sales improve as the months pass, resulting in many people looking to resell their property to keep up with expenses.
While figures for median-priced houses for sale in Calgary are trending up, real estate pundits are wary about a widening gap in housing prices and income, which will eventually make it harder for working professionals to own homes. Experts opine that should this trend keep up, people might have to opt for rental instead.
Affordable Calgary homes may have dipped somewhat but overall in Alberta, the province's affordability position hasn't turned people away. For first-time home buyers in Calgary, however, saving for a down payment can increasingly become a difficult barrier. No matter the obstacle though, people with big aspirations will naturally just keep looking for the home of their dreams.
Lending institutions subscribe to two simple affordability rules: First, your housing costs shouldn't go beyond 32% of your gross monthly income. It's called the GDS (gross debt service) ratio. Second, your debt load shouldn't be more than 40% of your gross monthly income. This covers housing costs, car loans, credit card bills, among others, and this is your TDS (total debt service) ratio.