Whether you rent or own…we pay a premium to live in Vancouver. The question is – what can you afford to pay?

The recommendation is that you do not pay more than 32% of your gross (before taxes) monthly household income towards housing. This calculation includes the housing payment (principle and interest or rent) plus property taxes, strata fees and utilities including heat and gas. For example, if you earn $48,000 per year or $4,000 per month, 32% of the gross monthly is $1,280 per month. Whether or not you can afford to pay this much on housing depends on your other financial obligations. Do you have a car loan, pay for child care? These are all large and fixed expenditures. The bigger the chunk of your paycheck that goes to them, the smaller amount that is left for savings, lifestyle and discretionary spending.

For us, about 32% is just right, much more than that though and we’d feel the pinch each month.