Published On Sat Jan 1 2011
Dana Flavelle
Business Reporter
The rate on a five-year mortgage was a whopping 11.75 per cent the year I decided to buy my first house.
The price of a small semi-detached in south Riverdale was $160,000, modest by today’s standards.
And the cost of carrying the loan — about $1,200 a month — on a journalist’s paycheque made me wonder if I would ever go on another vacation, buy a designer dress, or eat out.
Still, I dove in to the market fearing, like many people at that time, that real estate prices in Toronto would soon soar out of the average person’s reach.
The year was 1987. I had a steady full time job, and a downpayment thanks to generous parents and a federal Registered Home Ownership Savings Plan. And I was tired of paying $800 a month in rent to live in a tiny one-bedroom apartment. I was helping pay down someone else’s mortgage.
We take it for granted now. Single women buy houses on their own all the time. But at that time, it was still a relatively unusual phenomenon.
My first stop was the bank, to get pre-qualified for a loan. I remember being shocked at how much I could afford to borrow. The rule of thumb, then as now, was you could carry up to 32 per cent of your gross monthly income in mortgage, property taxes and heating bills.
I would definitely need a roommate.
Even with a big loan, my budget at $160,000 was low by Toronto standards. The average house price was about $180,000 that year, according to Toronto Real Estate Board historic data.
House hunting proved to be a daunting experience.
I can’t remember now how many places I looked at; one in particular caught my imagination. A quaint little cottage in the Beaches, at $225,000, was way out of my reach. I still drive by it occasionally and think how perfect it would have been.
Reality dictated that I would end up in what was then called “south Riverdale,” at that time a somewhat dodgy area trying to capitalize on its proximity to the more fashionable Riverdale to the north.
There was a bar at the end of the street. And a biker club a few blocks away.
A colleague dubbed the neighbourhood “Leadville” in honour of the Canada Metal Ltd. plant a couple of blocks away. Now shuttered, the plant had left a legacy of contaminated soil. Not the kind of dirt you’d want your children eating off their fingers after a day in the backyard.
But the house, a three-bedroom semi in good condition, was listed for $169,000.The price fit my pocketbook. It was clear after months of looking that I wasn’t going to find anything better.
After some dickering, a conditional offer, and a home inspection, the deal was sealed for $160,000. A few months later, I moved in.
It was the best investment I ever made.
Not long afterwards, interest rates began falling. House prices continued to rise.
Two years later, just as the market was peaking, I got married and sold my little starter home for $225,000. Taking the proceeds, and with the help of our combined incomes, we invested in a bigger detached home in a nicer area.
The recession in the early ’90s took some of the shine off real estate for a few years.
But eventually prices resumed their upward trajectory. Mortgage rates continued to decline. Our family expanded to include two kids and we moved again, this time borrowing even more than our original mortgage.
Interest rates were so low we could afford to carry a lot more debt. Banks had become far more flexible about negotiating the rate of interest, especially for borrowers with good credit ratings or equity in their homes. And borrowers could spread their payments over a longer period, further reducing the monthly payment.
The bank fell all over itself trying to get us to borrow even more than we needed to pay for the house, saying we could use it to finance a cottage, a car, or vacation.
Today, a five-year mortgage carries an average rate of just 5.44 per cent, according to the Bank of Canada.
Starter homes like my first little semi-detached on Bertmount Ave. now fetch $469,000.
With prices so high, and interest rates so low, no wonder Canadians are carrying record debt loads.
And you can understand why Bank of Canada Governor Mark Carney frets. How will Canadians manage, and the housing market fare, when interest rates, inevitably, rise again?
The rate on a five-year mortgage was a whopping 11.75 per cent the year I decided to buy my first house.
The price of a small semi-detached in south Riverdale was $160,000, modest by today’s standards.
And the cost of carrying the loan — about $1,200 a month — on a journalist’s paycheque made me wonder if I would ever go on another vacation, buy a designer dress, or eat out.
Still, I dove in to the market fearing, like many people at that time, that real estate prices in Toronto would soon soar out of the average person’s reach.
The year was 1987. I had a steady full time job, and a downpayment thanks to generous parents and a federal Registered Home Ownership Savings Plan. And I was tired of paying $800 a month in rent to live in a tiny one-bedroom apartment. I was helping pay down someone else’s mortgage.
We take it for granted now. Single women buy houses on their own all the time. But at that time, it was still a relatively unusual phenomenon.
My first stop was the bank, to get pre-qualified for a loan. I remember being shocked at how much I could afford to borrow. The rule of thumb, then as now, was you could carry up to 32 per cent of your gross monthly income in mortgage, property taxes and heating bills.
I would definitely need a roommate.
Even with a big loan, my budget at $160,000 was low by Toronto standards. The average house price was about $180,000 that year, according to Toronto Real Estate Board historic data.
House hunting proved to be a daunting experience.
I can’t remember now how many places I looked at; one in particular caught my imagination. A quaint little cottage in the Beaches, at $225,000, was way out of my reach. I still drive by it occasionally and think how perfect it would have been.
Reality dictated that I would end up in what was then called “south Riverdale,” at that time a somewhat dodgy area trying to capitalize on its proximity to the more fashionable Riverdale to the north.
There was a bar at the end of the street. And a biker club a few blocks away.
A colleague dubbed the neighbourhood “Leadville” in honour of the Canada Metal Ltd. plant a couple of blocks away. Now shuttered, the plant had left a legacy of contaminated soil. Not the kind of dirt you’d want your children eating off their fingers after a day in the backyard.
But the house, a three-bedroom semi in good condition, was listed for $169,000.The price fit my pocketbook. It was clear after months of looking that I wasn’t going to find anything better.
After some dickering, a conditional offer, and a home inspection, the deal was sealed for $160,000. A few months later, I moved in.
It was the best investment I ever made.
Not long afterwards, interest rates began falling. House prices continued to rise.
Two years later, just as the market was peaking, I got married and sold my little starter home for $225,000. Taking the proceeds, and with the help of our combined incomes, we invested in a bigger detached home in a nicer area.
The recession in the early ’90s took some of the shine off real estate for a few years.
But eventually prices resumed their upward trajectory. Mortgage rates continued to decline. Our family expanded to include two kids and we moved again, this time borrowing even more than our original mortgage.
Interest rates were so low we could afford to carry a lot more debt. Banks had become far more flexible about negotiating the rate of interest, especially for borrowers with good credit ratings or equity in their homes. And borrowers could spread their payments over a longer period, further reducing the monthly payment.
The bank fell all over itself trying to get us to borrow even more than we needed to pay for the house, saying we could use it to finance a cottage, a car, or vacation.
Today, a five-year mortgage carries an average rate of just 5.44 per cent, according to the Bank of Canada.
Starter homes like my first little semi-detached on Bertmount Ave. now fetch $469,000.
With prices so high, and interest rates so low, no wonder Canadians are carrying record debt loads.
And you can understand why Bank of Canada Governor Mark Carney frets. How will Canadians manage, and the housing market fare, when interest rates, inevitably, rise again?
The rate on a five-year mortgage was a whopping 11.75 per cent the year I decided to buy my first house.
The price of a small semi-detached in south Riverdale was $160,000, modest by today’s standards.
And the cost of carrying the loan — about $1,200 a month — on a journalist’s paycheque made me wonder if I would ever go on another vacation, buy a designer dress, or eat out.
Still, I dove in to the market fearing, like many people at that time, that real estate prices in Toronto would soon soar out of the average person’s reach.
The year was 1987. I had a steady full time job, and a downpayment thanks to generous parents and a federal Registered Home Ownership Savings Plan. And I was tired of paying $800 a month in rent to live in a tiny one-bedroom apartment. I was helping pay down someone else’s mortgage.
We take it for granted now. Single women buy houses on their own all the time. But at that time, it was still a relatively unusual phenomenon.
My first stop was the bank, to get pre-qualified for a loan. I remember being shocked at how much I could afford to borrow. The rule of thumb, then as now, was you could carry up to 32 per cent of your gross monthly income in mortgage, property taxes and heating bills.
I would definitely need a roommate.
Even with a big loan, my budget at $160,000 was low by Toronto standards. The average house price was about $180,000 that year, according to Toronto Real Estate Board historic data.
House hunting proved to be a daunting experience.
I can’t remember now how many places I looked at; one in particular caught my imagination. A quaint little cottage in the Beaches, at $225,000, was way out of my reach. I still drive by it occasionally and think how perfect it would have been.
Reality dictated that I would end up in what was then called “south Riverdale,” at that time a somewhat dodgy area trying to capitalize on its proximity to the more fashionable Riverdale to the north.
There was a bar at the end of the street. And a biker club a few blocks away.
A colleague dubbed the neighbourhood “Leadville” in honour of the Canada Metal Ltd. plant a couple of blocks away. Now shuttered, the plant had left a legacy of contaminated soil. Not the kind of dirt you’d want your children eating off their fingers after a day in the backyard.
But the house, a three-bedroom semi in good condition, was listed for $169,000.The price fit my pocketbook. It was clear after months of looking that I wasn’t going to find anything better.
After some dickering, a conditional offer, and a home inspection, the deal was sealed for $160,000. A few months later, I moved in.
It was the best investment I ever made.
Not long afterwards, interest rates began falling. House prices continued to rise.
Two years later, just as the market was peaking, I got married and sold my little starter home for $225,000. Taking the proceeds, and with the help of our combined incomes, we invested in a bigger detached home in a nicer area.
The recession in the early ’90s took some of the shine off real estate for a few years.
But eventually prices resumed their upward trajectory. Mortgage rates continued to decline. Our family expanded to include two kids and we moved again, this time borrowing even more than our original mortgage.
Interest rates were so low we could afford to carry a lot more debt. Banks had become far more flexible about negotiating the rate of interest, especially for borrowers with good credit ratings or equity in their homes. And borrowers could spread their payments over a longer period, further reducing the monthly payment.
The bank fell all over itself trying to get us to borrow even more than we needed to pay for the house, saying we could use it to finance a cottage, a car, or vacation.
Today, a five-year mortgage carries an average rate of just 5.44 per cent, according to the Bank of Canada.
Starter homes like my first little semi-detached on Bertmount Ave. now fetch $469,000.
With prices so high, and interest rates so low, no wonder Canadians are carrying record debt loads.
And you can understand why Bank of Canada Governor Mark Carney frets. How will Canadians manage, and the housing market fare, when interest rates, inevitably, rise again?
The rate on a five-year mortgage was a whopping 11.75 per cent the year I decided to buy my first house.
The price of a small semi-detached in south Riverdale was $160,000, modest by today’s standards.
And the cost of carrying the loan — about $1,200 a month — on a journalist’s paycheque made me wonder if I would ever go on another vacation, buy a designer dress, or eat out.
Still, I dove in to the market fearing, like many people at that time, that real estate prices in Toronto would soon soar out of the average person’s reach.
The year was 1987. I had a steady full time job, and a downpayment thanks to generous parents and a federal Registered Home Ownership Savings Plan. And I was tired of paying $800 a month in rent to live in a tiny one-bedroom apartment. I was helping pay down someone else’s mortgage.
We take it for granted now. Single women buy houses on their own all the time. But at that time, it was still a relatively unusual phenomenon.
My first stop was the bank, to get pre-qualified for a loan. I remember being shocked at how much I could afford to borrow. The rule of thumb, then as now, was you could carry up to 32 per cent of your gross monthly income in mortgage, property taxes and heating bills.
I would definitely need a roommate.
Even with a big loan, my budget at $160,000 was low by Toronto standards. The average house price was about $180,000 that year, according to Toronto Real Estate Board historic data.
House hunting proved to be a daunting experience.
I can’t remember now how many places I looked at; one in particular caught my imagination. A quaint little cottage in the Beaches, at $225,000, was way out of my reach. I still drive by it occasionally and think how perfect it would have been.
Reality dictated that I would end up in what was then called “south Riverdale,” at that time a somewhat dodgy area trying to capitalize on its proximity to the more fashionable Riverdale to the north.
There was a bar at the end of the street. And a biker club a few blocks away.
A colleague dubbed the neighbourhood “Leadville” in honour of the Canada Metal Ltd. plant a couple of blocks away. Now shuttered, the plant had left a legacy of contaminated soil. Not the kind of dirt you’d want your children eating off their fingers after a day in the backyard.
But the house, a three-bedroom semi in good condition, was listed for $169,000.The price fit my pocketbook. It was clear after months of looking that I wasn’t going to find anything better.
After some dickering, a conditional offer, and a home inspection, the deal was sealed for $160,000. A few months later, I moved in.
It was the best investment I ever made.
Not long afterwards, interest rates began falling. House prices continued to rise.
Two years later, just as the market was peaking, I got married and sold my little starter home for $225,000. Taking the proceeds, and with the help of our combined incomes, we invested in a bigger detached home in a nicer area.
The recession in the early ’90s took some of the shine off real estate for a few years.
But eventually prices resumed their upward trajectory. Mortgage rates continued to decline. Our family expanded to include two kids and we moved again, this time borrowing even more than our original mortgage.
Interest rates were so low we could afford to carry a lot more debt. Banks had become far more flexible about negotiating the rate of interest, especially for borrowers with good credit ratings or equity in their homes. And borrowers could spread their payments over a longer period, further reducing the monthly payment.
The bank fell all over itself trying to get us to borrow even more than we needed to pay for the house, saying we could use it to finance a cottage, a car, or vacation.
Today, a five-year mortgage carries an average rate of just 5.44 per cent, according to the Bank of Canada.
Starter homes like my first little semi-detached on Bertmount Ave. now fetch $469,000.
With prices so high, and interest rates so low, no wonder Canadians are carrying record debt loads.
And you can understand why Bank of Canada Governor Mark Carney frets. How will Canadians manage, and the housing market fare, when interest rates, inevitably, rise again?
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