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Hey everyone,

4th year medical student hoping to land a 5-year residency spot at the University of Toronto.

Obviously waiting until match day before making any decisions, but jw what people would do in my situation? I’m thinking of buying a condo next year with my partner.

I will have ~100K on LOC and 80K on OSAP loans. Partner makes 60k/year right now and has ~50K in savings at the moment with another potentially 50K from inheritance money to put down on a mortgage. I would also likely put down another 50-100K from my LOC as down payment (looking to put a 20% down payment). Currently looking at condos in close proximity to the hospitals and it looks like I can expect to buy in the range of 600-750K. Would it be worth it to buy with the level of debt I’d be graduating with? 
 

My partner and I really don’t like the idea of renting for 5 years. So we are really considering buying just not sure if is the best financial move.

 

Would love your opinion and feedback regarding this! 

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Excluding condo fees and property taxes, a 2% mortgage (you probably would pay under 2%) amortized over 25 years would cost you $2,540/month. Condo fees would add at least another $500/month. Then, there are property taxes (and repairs).

I would think this is affordable. The condo market is down now. What would the market be like in 5 years when perhaps you change cities for a job, is anybody's guess. There are no guarantees and you could take a hit (or not). If life were simple! I understand that you consider paying rent as, in a sense, throwing money away. Well, if the condo market takes a hit when you need to sell, you will suffer a loss. There are no easy answers.

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the 5 year mark is usually were in general you break even with things so the math often doesn't help you figure this stuff out much ha - you have to assess if you still have enough LOC room post to be flexible if something else comes up, your thoughts on the market as well as what happens if you are wrong with those thoughts, sounds dramatic but obviously if you and your partner split what would happen then etc, and of course how sure you are the place/location works for you. Also important is what would you do with the place in 5 years potentially.

also the more a market has gone upward in the recent past the less likely it will do so in the near future. Of course that doesn't mean it won't go up either, just another probability to consider. 

 

 

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You need to meet a financial advisor who will be able to calculate with you what is the best option financially, with various scenarios (including how the market evolves etc.). They have calculators to do that, depending on the cost of rent & the cost of the condo you want to buy. You could also probably find such calculators online. Good luck :) 

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Definitely get in touch with a mortgage broker and see what kind of financing you will be able to access. Generally speaking, your current debt level will significantly impact the size of mortgage you will be able to qualify for, so you may find that you are not able to get a mortgage that is sufficient to purchase the condo you want. Additionally, you can use your line of credit to put a higher down-payment down, but you will still have to pay the high-ratio insurance on your mortgage because you are still borrowing money for your down-payment. Borrowing on the LoC for the down payment will also further reduce your mortgage affordability, so it may not be worth doing that in the end. There are ways and means to get around some of these challenges and regulations (such as having a very financially stable friend or family member cosign on your mortgage), but it would be helpful to sit down with a mortgage broker asap to see if the numbers will work out for you and your partner. Meeting with a knowledgeable broker costs you nothing and provides a wealth of information. I'm currently trying to do a similar thing in Vancouver, and it is proving to be trickier than I had hoped. Best of luck :)  

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