Oshawa, Hamilton cheapest rent and mortgages in GTHA but middle of the pack nationally – report

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Published February 6, 2024 at 11:36 am

The question of buying or renting is asked every time the housing market fluctuates – which is often – and is no less easier to answer today as it was pre-pandemic.

The gap between rent and mortgage payments is less pronounced away from the major housing markets of Toronto and Vancouver, leaving GTA residents with other factors to help them make their decision.

To find out how much more affordable it is to rent rather than buy, real estate company Zoocasa analyzed 26 markets across Canada and compared monthly rental prices and monthly mortgage payments using average prices in December 2023.

Additional costs, such as utilities or property taxes, were not considered. Rental price numbers were sourced from Rentals.ca and were calculated by finding the average price of one-bedroom and two-bedroom rentals. Monthly mortgage payments were calculated assuming a 20 per cent down payment and a 5-year fixed mortgage rate of 4.84 per cent amortized over 25 years.

In the GTA, Oshawa stood out as the cheapest rental market, with average rents $1,990 per month. It also has the least expensive mortgage payments at $3,332 per month on homes averaging $727,493. That still leaves a gap of $1,342, not including taxes and other homeowner fees.

The GTA leader only puts Oshawa in the middle of the pack in Canada in 11th place, just one spot better than Hamilton, which was ranked tenth among the 26 markets studied with average rent at $2,005 and mortgage payments pegged at $3483 on homes valued (on average) at $760,376.

Outside the GTHA, Kingston is most affordable Ontario market for buying a home, with mortgage payments averaging $2,474 a month but when it comes to renting, St, Catharines ($1,769) and Windsor ($1,753) have it beat.

Nationally, Vancouver and Toronto – as expected – have the highest mortgage payments and average rents, though the gap between the two numbers is higher in a few other places.

Burlington, Mississauga, and Brampton, for example, all have a larger gap between the average monthly rent and the average monthly mortgage payment compared to Toronto, where the gap is $1,970.

The difference in monthly mortgage and rent is under $500 in seven markets in Canada, led by Winnipeg, where the average rent in is $1,526 and the average monthly mortgage payment is $1,521 – $5 less than rent. Though this is the only market on the list that has an average mortgage payment less than average rent, Regina ($62 difference) and Quebec City ($54) came very close. Homeowners in Regina also benefit from having the smallest average monthly mortgage payment of the markets analyzed at $1,373, with Winnipeg and Quebec City following close behind.

The year kicked off with a hold on the overnight lending rate, leading a lowering of fixed rates. In October, the 5-year fixed mortgage rate peaked at 5.49 per cent but by January 2024 the rate dropped as low as 4.89 per cent.

As interest rates have climbed over the past two years, rents have increased by 22 per cent according to Rentals.ca. While it is unlikely rents will come down due to the drop in mortgage rates, a hold would certainly be welcomed by renters.

To see the full report visit Rent vs Mortgage.

 

 

 

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