Many of us want to own our own homes, but as we watch real estate prices in Toronto continue to climb, we may feel that affordable mortgages are beyond our means. The good news is that it’s still possible to buy a home in the city without mortgaging your life in the process.
Toronto has several vibrant, up-and-coming neighbourhoods that are fun, safe and affordable. In fact, many homes in these areas still sell for significantly less than $1 million. Let’s take a look at three of these areas.
Mimico is located just west of the pre-amalgamation Toronto border, in the suburb of Etobicoke. It’s not exactly the tony east-end Beaches neighbourhood, but residents here still live life on the waterfront, and they do so for a lot less than what a house in the Beaches costs. Mimico is incredibly picturesque and more connected than you might expect: Union Station is just 15 minutes away by GO train, which is actually less time than it takes to get there by streetcar from Roncesvalles. The area is home to an eclectic group of local businesses, including a bakery and a tavern with an on-site microbrewery. The average sale price of a house in Mimico is less than $600,000 (the most affordable homes are fixer-upper bungalows), though prices can go as high as $700,000 or $800,000.
A bit closer to downtown is Rockcliffe-Smythe, located near the quickly growing Stockyards area. This might be the last place in town where you don’t have to be a millionaire to own a detached home somewhat near the city’s core. Being close to St. Clair means easy streetcar access and direct connections to both the University and Yonge subway lines. There’s an outdoor shopping mall, the Stock Yards Village, which features more than 50 stores, and the hip Junction neighbourhood is just next door. Best of all, there’s an amazing ravine system with a variety of multi-use trails. The average sale price of a home here is just under $700,000.
Even closer to downtown is Corso Italia, Toronto’s northern Little Italy. More than 80 per cent of Corso Italia is made up of first- or second-generation immigrants who have built a vibrant community. The area has a variety of quality food options, and you’ll still find a lot of mom-and-pop shops lining the streets alongside trendier spots. There’s a lot of green space and, like Rockcliffe-Smythe, easy access to the St. Clair streetcar and both the Yonge and University subway lines. Homes here sell for $800,000 to $900,000 on average.
Neighbourhoods like these can be even more affordable with help from the right financial institution. We reached out to HSBC to talk about how they’re helping customers afford homes in today’s expensive market.
“There are many people who really want to get into the market before prices climb again,” says Barry Gollom, senior vice-president of products and customer experience at HSBC Bank Canada. “For many first-time home buyers, the barrier in their mind might be the fact that they don’t have a large enough down payment.”
Homeowners are usually encouraged to make a down payment of at least 20 per cent of the property value, which allows them to avoid paying mortgage default insurance premiums. Down payments of less than 20 per cent mean homebuyers will incur extra insurance costs on top of their mortgage payments. “This barrier keeps many out of the market as prices continue to increase,” Gollom says. “A high-ratio mortgage—any mortgage where the down payment is less than 20 per cent—helps people and families get into homes so they can start building equity before they have the 20 per cent down payment.”
Buying a home is one of the biggest financial transactions many of us will ever make, so the sooner you start thinking about it and saving for it, the better off you’ll be. If you only start to think about buying a home at the same time you start looking for one, you may find you’re not ready. Still, not all of us have the financial means to save for 20 per cent of the price of our homes ahead of time. “Saving for a down payment takes strong financial discipline,” Gollom says. “It’s something everyone should practice. In reality, though, some would prefer to practice discipline through scheduled payments on their mortgage. For these people, a high-ratio mortgage might be the best solution to meet their needs. For this reason, we launched a high-ratio offer to better serve these clients.”
HSBC knows buying a home is a major decision. That’s why they offer pre-approved mortgage rates for 120-days, giving homebuyers the time they need to be sure they’re making the best possible decision. HSBC also knows owning a home can still be expensive, even with a low mortgage rate. That’s why they offer free day-to-day banking for most eligible mortgages. “That monthly sting that you might feel with your current bank,” Gollom says, “that’s not felt here at HSBC.”