Here’s how much you need to earn to buy a home in Ottawa this spring

A new home is shown for sale in a housing development in Ottawa on Tuesday, July 14, 2020.THE CANADIAN PRESS/Sean Kilpatrick

The income required to buy a home in Ottawa dropped $250 in March, as interest rates continued to fall.

A new report from Ratehub.ca shows homebuyers in the capital needed an income of $133,350 to buy the average priced home in Ottawa last month, down from $133,600 in February. In January, the average income required to purchase a home in Ottawa was $141,420.

The report looks at the cost of buying a home with a 10 per cent down payment, a 25-year amortization, $4,000 annual property axes and the monthly heating bill. Ratehub.ca used a mortgage rate of 4.38 per cent and a stress test rate of 6.38 per cent.

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The average home price in Ottawa was $626,200 in March, down from $618,000 in February. According to the report, the mortgage payment for an average-priced home in Ottawa was $3,177 in March, down from $3,190 in February due to the decrease in interest rates.

Ratehub.ca says 10 out of 13 major Canadian cities saw “improved mortgage affordability” in March.

The average income required to buy a home dropped $4,190 in Toronto to $217,010 and was down $2,440 in Vancouver to $240,160.

“Again this month, home prices increased in the majority of the cities we looked at, however, mortgage rates dropped enough to actually improve home affordability in most places,” Penelope Graham, mortgage expert at Ratehub.ca, said in a statement.

“Toronto saw the most significant decrease with $4,190 less income required to purchase the average home. This is due to home prices falling ($5,400) as well as the decrease in mortgage rates.”

Edmonton, Regina and Winnipeg were the three Canadian cities that saw the income required to purchase an average-priced home increase.

The Bank of Canada held its policy rate steady at 2.75 per cent last week. It was the first time the key interest rate was unchanged following seven consecutive rate cuts since June.

With files from The Canadian Press