MMM : The hidden $80K cost of buying a home
A $1M House Isn’t Necessarily a $1M House
When most buyers compare homes, they focus on one number: the purchase price. But the sticker price is only part of the story. In many cases, two homes with very different prices can have surprisingly similar monthly carrying costs.
A recent comparison between Durham Region and Markham is a perfect example.
The Comparison
In Durham Region, a home worth roughly $1.2 million can easily carry property taxes close to $10,000 per year.
In Markham, a home worth approximately $1.47 million may have property taxes around $5,700 per year.
That is a difference of about $4,300 annually, or roughly $358 per month.
At current mortgage rates, an extra $358 per month is roughly equivalent to carrying about $80,000 more in mortgage debt.
At first glance, the Markham home appears to be $270,000 more expensive. However, once the property tax difference is factored into the monthly budget, the effective cash-flow gap starts to feel much smaller.
Why Property Taxes Matter
Many buyers assume that a more expensive home automatically means a much higher monthly payment. That is not always true.
Property taxes vary significantly from one municipality to another, and those differences can add up to thousands of dollars every year. Over time, that can have a meaningful impact on affordability.
Of course, this comparison is not perfect. Property taxes can change, and interest rates can change as well. The goal is not to calculate an exact number—it is to understand that ownership cost is more important than purchase price alone.
The Metric Most Buyers Miss
When comparing homes, consider the full carrying cost, including:
Mortgage payment
Property taxes
Utilities
Insurance
Maintenance
Condo fees (if applicable)
A lower-priced home with high property taxes can sometimes cost as much—or more—to own than a higher-priced home in a lower-tax municipality.
A Useful Rule of Thumb
Before deciding that one home is “too expensive,” ask:
What is the total monthly cost to own this property?
That single question often leads to a much more accurate affordability comparison than looking at the price tag alone.
The Bottom Line
Whether you are buying your first home, moving within the GTA, or evaluating an investment property, compare the carrying cost, not just the purchase price. The municipality can make a much bigger difference than many buyers realize.
If you are considering a home purchase and want help comparing the true monthly cost of different properties, I’m always happy to provide unbiased, genuine advice.
