Vancouverites love to complain about housing costs. A few of my friends and neighbours are currently looking at renting a home, and the rates are outrageous. You can easily pay $1,800 for a one-bedroom apartment downtown, and at the end of your lease you've padded your landlord's pockets but haven't built up any equity of your own.If you're planning to stay in the area long term, why not consider buying?Even with a small down payment, the mortgage amount and overall costs of property ownership can be less than renting; and you have the added benefit of creating equity for yourself. Here's a rough look at what your monthly payments might be based on a fixed interest rate of 2.99 with a 25-year amortization (except the 20 per cent down payment, which uses a 30-year amortization):
• With a 5 per cent down payment, you would pay $1,390 per month for a $300,000 mortgage, $1,625 for a $350,000 mortgage, or $1,850 for a $400,000 mortgage. The required household income would be between $65,000 and $98,000.
• With a 10 per cent down payment, you would pay $1,300 per month for a $300,000 mortgage, $1,525 for a $350,000 mortgage, or $1,740 for a $400,000 mortgage. The required household income would be between $62,000 and $93,000.
• With a 15 per cent down payment, you would pay $1,230 per month for a $300,000 mortgage, $1,430 for a $350,000 mortgage, or $1,640 for a $400,000 mortgage. The required household income would be between $57,000 and $88,000.
• With a 20 per cent down payment, you would pay $1,000 per month for a $300,000 mortgage, $1,175 for a $350,000 mortgage, or $1,340 for a $400,000 mortgage.
The required household income would be between $55,000 and $83,000.If you're putting down less than 20 per cent, you will also need to pay for mortgage insurance, which is reflected in the figures above. These numbers don't include property taxes, heating, or maintenance, as well as condo fees (if applicable). You may be able to reduce your property taxes by applying for the B.C. Home Owner Grant, and there are several tax breaks available to first-time homebuyers.You can see that the larger your down payment, the less your monthly payments. A down payment is a large sum of money, but if a dual-income couple is buying a home together, 5 per cent down shouldn't be impossible. Many parents gift a down paymentto their kids, allowing average income clients to get into the real estate market and afford bigger homes.Before you buy a home, you should of course consider how long you are planning to stay there and whether or not you have the cash flow to cover unexpected issues including a special assessment or major repairs. That said, there are benefits to homeownership: stability, pride in ownership, and the potential for appreciation over time, just to name a few. Owning your own home also means being able to decorate the way you want and will allow you to have a pet (although some strata buildings do have pet restrictions allowing certain types and sizes).At the end of the day, would you rather pay $1,800 in rent or mortgage?