“David Eby [claims he can’t] afford a $600,000 two bedroom condo, so he’s renting for $2,700 per month,” Dustan Woodhouse
, a broker with Dominion Lending Centres
Canadian Mortgage Experts, told MortgageBrokerNews.ca. “On a $600,000 purchase, if Mr. Eby had a 20% down payment, it would yield a mortgage of $480,000 and that would mean a mortgage payment of $1,920 a month.
“Significantly less than the $2,700 a month he’s paying in rent; even factoring in property taxes and condo fees.”
David Eby, an NDP member of legislative assembly, was recently profiled as part of a McLean’s story
about the influence of foreign investment on Vancouver’s real estate market. He claimed to be priced out of the market.
“The Vancouver MLA, a lawyer touted as a future NDP leader, is among those priced out of the local market,” the McLean’s article says. “Eby and his wife, a nurse currently in medical school, recently sold their 530-sq.-ft., one-bedroom condo in Kitsilano, which was too cramped for the two of them and their 19-month-old toddler.”
“‘A two-bedroom condo in my constituency starts at $600,000—a non-starter for us,’ he says.
But, as Woodhouse pointed out, saving enough for a down payment would allow Eby to purchase a home – and lower his monthly housing expenses.
Not everyone can afford a 20% down payment, however. What if Eby were to put 5% down?
“If Mr. Eby could only scrape together a 5% down payment, then his mortgage payment would be $2,700 a month,” Woodhouse said. “At today’s interest rates, 55% of his collective payments would go straight towards principal. Less than half would be interest. But right now, he’s giving $2,700 away every month.”
Of course, Eby’s claim that he can’t afford a home could be a bit of political pandering. What better way to connect with potential voters than to share their plight.
One politician claims he has been priced out of one of Canada’s hottest housing markets but, as one broker points out, he may be able to buy – if he decides to heed a professional’s advice.