The rental market might be putting the squeeze on many British Columbians, but renters in three major West Coast cities are still paying less per month than mortgage holders, according to a new report from online brokerage Zoocasa.
Meanwhile, the difference in monthly payments for mortgage holders versus renters is proving more pronounced in B.C. than the rest of Canada.
On average, mortgage holders in Vancouver, Victoria and Surrey pay $1,941 more per month when compared to renters within those three respective cities.
The difference in mortgage payments compared with rent is less than $500 in 11 out of 27 Canadian cities Zoocasa examined. None are in B.C.
The average Vancouver mortgage holder pays $1,755 more per month than the average renter. This difference is $1,429 in Victoria.
Surrey has the biggest difference in all of Canada with an average monthly mortgage of $4,841 and an average rent of $2,202. This means mortgage holders pay $2,639 more than renters.
Rental prices in B.C. have been surging due to increasing demand and a persistently low vacancy rate. The average rental in Vancouver is $3,404, according to the real estate listing website. As renters are feeling the pinch of a tight market, mortgage holders have also been seeing increasing payments alongside multiple interest rate hikes.
“With interest rates increasing, and mortgage payments likewise climbing, many prospective buyers are looking to the rental market as a more affordable housing option. But how much more affordable is it actually to rent rather than to buy?” said the July 26 report.
The monthly mortgage payments used in the study were calculated by assuming a 20 per cent down payment and a mortgage rate of 5.04 per cent, amortized over 30 years for the average price of a single-family home in the specific cities examined.
The average price of renting versus paying a monthly mortgage in Winnipeg is “nearly identical,” said the report. With an average monthly mortgage of $1,493 and average rent of $1,475, the gap is $18.
The least expensive cities for both rental and mortgages are in Alberta and Saskatchewan, where average monthly payments don’t exceed $1,700.