I have had more than one Boomer tell me that renting is stupid because YOU ARE THROWING YOUR MONEY AWAY! Get a mortgage and buy a house! Yeah, about that:
The average millennial’s after-tax household income is $44,093 a year, yet the national average price for a bungalow is $521,250. Even if the buyer comes up with a 20 per cent downpayment of $104,500 — monthly mortgage payments of $2,205 on a 20-year fixed-rate mortgage at 2.49 per cent will eat up around half of their income. That doesn’t include property tax and other expenses.
A 1% property tax on that house will eat up $5,200. The mortgage plus property tax gives us a total of $31,660 a year. So, the basic Millennial will have to pay 72% of his after-tax income for the privilege of owning an average house in Canada today.