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If you’ve been house hunting in Ontario, you’ve probably asked yourself: How does anyone afford this?

Even with prices dipping slightly, higher mortgage rates mean homeownership still feels out of reach for many. To help you see the real picture, we crunched the numbers to show how much household income you actually need to buy a typical home in major Ontario cities.

This guide uses real market data from fall 2025 , including average prices, today’s mortgage rates, and the federal stress test, so you can see exactly what it takes in each city.

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The State of Ontario’s Housing Market (Fall 2025)

• Average home price in Ontario: $828,896 (down 2.9% year-over-year)
• Greater Toronto Area average: $1,059,377 (down 5.5% YoY)
• Bank of Canada policy rate: 2.5% (as of Sept 2025)
• Typical 5-year fixed mortgage rate: ~3.9–4.5%
• Qualifying (stress test) rate: roughly 6.7%

Rent prices are still high, but for many, owning can cost nearly double the average rent, depending on where you live.

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How the Numbers Were Calculated:

To make each city comparable, we used:

• 20% down payment
• 25-year amortization
• Qualification at 6.68% (the stress test rate)
• 1% property tax
• $150/month heating cost
• 39% maximum gross debt service ratio (per CMHC rules)

This means the income figures below show how much you’d need to qualify for a typical home in each city, assuming no other debts.

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City-by-City Breakdown: How Much Income You Need to Buy a Home

🏙 Toronto (GTA)

• Average Home Price: $1,059,377
• Household Income Needed: $210,800 / year
• Monthly Housing Cost: ~$6,850

🏡 Durham Region

• Average Home Price: $877,963
• Household Income Needed: $175,500 / year
• Monthly Housing Cost: ~$5,700

🌆 Hamilton–Burlington

• Average Home Price: $753,300
• Household Income Needed: $151,200 / year
• Monthly Housing Cost: ~$4,915

🏛 Ottawa

• Average Home Price: $686,536
• Household Income Needed: $138,200 / year
• Monthly Housing Cost: ~$4,490

🏠 London

• Average Home Price: $651,329
• Household Income Needed: $131,400 / year
• Monthly Housing Cost: ~$4,270

🔧 Kitchener–Waterloo

• Average Home Price: $753,162
• Household Income Needed: $151,200 / year
• Monthly Housing Cost: ~$4,910

🚗 Windsor–Essex

• Average Home Price: $570,469
• Household Income Needed: $115,600 / year
• Monthly Housing Cost: ~$3,760

🌅 Barrie

• Average Home Price: $737,462
• Household Income Needed: $148,100 / year
• Monthly Housing Cost: ~$4,815

🎓 Kingston

• Average Home Price: $638,299
• Household Income Needed: $128,800 / year
• Monthly Housing Cost: ~$4,190

🌲 Sudbury

• Average Home Price: $513,420
• Household Income Needed: $104,500 / year
• Monthly Housing Cost: ~$3,400

🏔 Thunder Bay

• Average Home Price: $392,500
• Household Income Needed: $81,000 / year
• Monthly Housing Cost: ~$2,630

*Includes mortgage payment, estimated property tax, and heat (based on 20% down payment and 25-year amortization).

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Rent vs. Buy: What’s Actually Cheaper?

• Toronto: Avg rent is $2,592/month vs. ownership at $6,851/month
• Ottawa: Avg rent is $2,190/month vs. ownership at $4,493/month
• Ontario average rent: $2,316/month

Buying can cost 2–3x more monthly than renting in high-priced markets, though smaller cities like Sudbury or Thunder Bay show a much smaller gap and better long-term value.

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Why It’s Still So Hard to Qualify

Even though interest rates are easing, Canada’s mortgage stress test means lenders qualify you at about 2% higher than your actual rate. So even if your contract rate is 4.7%, you must prove you can afford payments at 6.7%.

That’s why incomes still need to be so high, the test is designed to protect borrowers from future rate hikes.

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How to Improve Your Buying Power

• Increase your down payment to shrink your mortgage.
• Shop for lower-tax areas (some towns are under 0.7%).
• Consider smaller homes or condos.
• Reduce debts before applying.
• Wait for future rate cuts – experts expect gradual easing through 2025.

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Takeaway:

Buying a home in Ontario in 2025 is still tough, but not impossible, especially if you look beyond the GTA. Cities like Sudbury, Kingston, Windsor, and Barrie offer better affordability, growing job markets, and smaller stress-test barriers.

Understanding the real income you need is the first step to finding where homeownership actually fits your budget.

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Sources & References:

• TRREB Market Watch (Sept 2025)
• CREA / OREA Market Data (2025)
• CMHC Mortgage Qualification Guidelines
• Bank of Canada Policy Rate Announcement (Sept 2025)
• Rentals.ca National Rent Report (Sept 2025)

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