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Name, age: Marissa, 40
Annual income: $80,000 from job, $13,200 from Canada Child Benefit
Debt: $14,000 credit card, $6,500 line of credit, $711,387 mortgage, $2,500 car loan
Savings: $25,000 in work pension, $8,792 in registered education savings plan (RESP)
What she does: Media sales
Where she lives: Rural southwestern Ontario
Top financial concern: “I’ll be 70 when my mortgage is paid off. That is scary to me. One of us will have to work until we’re 70.”
Marissa and her partner ran their own business for eight years before having kids, then realized they needed to increase their earnings if they wanted to buy a home.
“We wanted to own something, and neither of us were going to inherit anything,” she says.
Marissa found a permanent full-time job in media sales with an average annual salary of $80,000, including commission, which can jump to more than $100,000 on a good year, while her husband went back to working as a self-employed contractor. The couple, whose kids are eight and three years old, had saved enough to pay $85,000 in cash for a rural piece of land through a family friend in 2017. Their original plan was to build their own house, but that turned out to be much harder than they’d anticipated.
“One of the things we didn’t know is, you can’t really build a house yourself. The bank wants you working,” Marissa says of their years-long, demoralizing struggle to secure the money the needed to build their dream home, largely owing to their history of self-employment.
That’s because construction mortgages, where lenders advance you the money in stages to build or renovate your home, are seen as riskier and come with stricter conditions and higher rates than conventional mortgages, where the house is used as collateral.
They were saved by the post-COVID property boom: The land they bought for $85,000 increased in value to $400,000, which the bank then figured into their net worth and allowed them to borrow. The house was finally built – by someone else – in 2022, a 2,000-square-foot, one-storey home with three bedrooms, a massive unfinished basement and beautiful farm-field views. In the end, it cost them $726,163 to build their home, debt which they rolled into a regular mortgage.
“I’m very proud of the house we have, and I love it,” Marissa says, though adding that their struggles to get a mortgage took a toll on the couple’s mental health.
“Being someone who is quite good at doing things themselves, this is a situation where you don’t have control. You are at someone else’s graces.”
Waiting until after COVID to build meant costs for the home went up, with construction materials such as lumber more than doubling in price. Their initial mortgage payment was set to be $2,700 a month – already a big jump from the $1,500 they had been paying to rent – but an additional $450 was added to cover the higher costs. Then came the rise in interest rates, which bumped their payments up to $4,033 a month.
“That was super stressful,” Marissa says.
She worries about how long they will be paying their mortgage, with it set to end when they are 70, and hopes nothing derails their ability to make payments.
“The idea of losing this house that has taken my whole life to get is too much.”
Her typical monthly expenses:
Investment and savings: $490
$370 to pension. “I put in 5 per cent of my earnings and my work matches it.”
$120 to RESP
Servicing debt: $4,851
$500 to credit card
$4,033 to mortgage. “The initial mortgage was to be $2,700 a month. When the rates changed, that was super stressful.”
$318 on car payments. “It was a seven-year term and will be done next June. It’s a Hyundai, so I don’t think it’s really going to last too much past that.”
Household and transportation: $1,532
$130 to property insurance
$500 to property tax
$200 on electricity
$100 on natural gas
$25 on water
$240 on gasoline
$200 on car insurance
$67 on car maintenance
$70 on cell phone
Food and drink: $750
$600 on groceries
$100 on eating out
$50 on alcohol
Miscellaneous: $1,651
$661 to income tax
$50 on going out. “Very little.”
$50 on cannabis
$30 on streaming services
$30 on Spotify and podcast subscriptions
$25 on clothes. “We’re a used-clothes family, but occasionally we buy something new.”
$20 on cat
$550 on child care
$32 on kids’ activities. “Singing and swimming.”
$50 on gardening. “Bulbs, seeds and soil.”
$7 on haircuts. “$40, two times a year.”
$4 on cosmetics
$17 on dental. “Covered mainly by benefits.”
$42 on donations
$83 on gifts
Some details may be changed to protect the privacy of the person profiled. We want to thank them for sharing their story. Are you a millennial or Gen Z who would like to participate in a Paycheque Project? Send us an e-mail.