In 1997, when I was 17, my family emigrated from the United Arab Emirates to Canada. We lived for a while in Montreal and Ottawa, but ultimately settled in Scarborough, in suburban Toronto. I married my wife, Sana, in 2008, through a family member—she’s originally from India, but lived in the Emirates, which is how our families knew each other. She moved to Canada after we married.
In 2012, we had our first son, Yusuf, while living in a one-bedroom apartment in Scarborough. When we had our second son, Sulaiman, in 2015, we moved to a two-bedroom, rent-controlled condo nearby, paying $1,750 a month. It was great having the extra bedroom, and the building even had a pool and a gym. But in 2015, knowing we were going to need more space soon, we started saving up for a down payment on a home.
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By 2019, our rent had gone up to about $2,000 a month, but life was still pretty affordable overall. We were a dual-income family, earning $110,000 a year. I was a software developer and my wife worked as a customer support technician. We ate out at restaurants at least twice a week. Yusuf and Sulaiman played soccer and took tae kwon do. We travelled a lot, taking the boys to Disneyland or to visit family in Calgary. Sana and I went to Europe, hitting London, Paris and Rome. But the boys were getting bigger—Yusuf was nine and Sulaiman was six—and the apartment was starting to feel small.
Then the pandemic hit, and with everyone stuck at home, our 1,300-square-foot condo was feeling really cramped. More space for the kids—and for us—became an urgent need. Most days, we all sat around the dining room table, with the boys doing remote schooling, and my wife and I juggling emails and work calls.
In the summer of 2020, with about $80,000 saved up, we officially started house hunting. We were eligible for an $800,000 mortgage—not a lot in the Greater Toronto Area, where home prices were high and skyrocketing like never before. We wanted at least three bedrooms and two bathrooms, which led us all the way out to Whitby, a small city about half an hour’s drive east of Toronto. (It was very frustrating that my wife and I earned close to the median household income in Toronto, yet to buy a home, we had to go far outside of town just to afford anything suitable.)
Still, we were thrilled when, in April of 2021—after losing out on a couple of bidding wars—we found a three-bedroom, two-bathroom townhouse in Whitby. It had a big backyard where the kids could run around in the summer, plus a finished basement where I could set up a home office. It was close to schools, parks and the beach at Lake Ontario.
At that point, a fixed-rate mortgage was running around 4 per cent. We asked around, looking for advice on what to choose—a variable or a fixed rate. Variable looked like the way to go, with banks offering rates around 2.5 per cent. And the summer before, Tiff Macklem, the governor of the Bank of Canada, reassured Canadians that interest rates would definitely stay low for a long time to come—it looked like a safe bet. Our realtor and a couple of banks, TD and CIBC, recommended going variable, suggesting it would probably peak at 4 or 4.5 per cent at most.
So in May, we pulled the trigger, buying the place for $790,000, with a variable mortgage at 2.45 per cent and a monthly payment of $3,410 a month (including property taxes). Things were great. The boys each had their own rooms. Sana and I did a little gardening in the backyard. We had very little financial stress and settled into a modest, comfortable home for our growing family.
That picture started to change last March, when the first interest rate hike happened, bringing the Bank of Canada’s overnight rate to 0.5 per cent. That brought our mortgage rate to 2.7 per cent and our monthly payment to about $3,500 a month.
I had a feeling that more hikes were on the horizon, and decided to switch jobs: Okay, there might be some financial pain up ahead, I thought. I need to make more money. I ended up in a job with a better role and higher pay—but then the rate hikes started getting out of control.
By September, the overnight rate hit 3.25 per cent, and our mortgage rate was 5.45 per cent, with payments of $4,300 a month. We had to start cutting back. I renegotiated our Rogers plan, stripping down to only internet and basic channels. I went for a higher deductible on our insurance, lowering the monthly payment. We started shopping for groceries on discount days, looking for deals on milk and eggs. But it didn’t stop. Now, after eight rate hikes, our mortgage rate is 6.45 per cent, and we’re paying $5,200 a month—a spike of $1,800 monthly, more than $20,000 more every year.
My wife recently switched to a project management role with her employer, increasing our combined household income to $150,000 a year. But even with that bump, we’re struggling to keep our heads above water. More than 40 per cent of our pre-tax income goes straight to our house, and we know it might get worse. With recent increases in gas and food prices, the hit has been even harder. We rarely eat out; extracurriculars for the kids, like soccer and tae kwon do, are on hold. Travel is completely out of the question. If my wife hadn’t also found another job, I’m not sure we would have been able to hang on to the house.
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We feel helpless and angry. If we lived way beyond our means, that would be one thing. But it’s not like we did something radical. We wanted a family home, we made some sacrifices and we got a decent-sized place in a decent neighbourhood. Hard-working, middle-class people should be able to buy homes in their own country without cutting back their lifestyles to the bone.
Recently, the Bank of Canada announced that interest rates would stay at 4.5 per cent, the first time it has held steady in more than a year. It’s a bit of a relief. But down in the U.S., the Fed just raised rates again, which makes me wonder how long it will be before Canada does the same. That’s always in the back of my mind.
With our current budget, we could likely make it through one or two more small hikes. If there are two more rate hikes, though, our payment will rise by another $300 a month. That will mean tough decisions. We would probably have to sell our place and go back to renting, which seems barely better, if at all. Rental prices are high, too. Shortly after we left our Scarborough condo, which cost $1,900 a month, rent controls were lifted, and the price shot up to $3,200 a month.
We feel like we’ve done nothing wrong, having relied on the advice of the government and financial institutions. Sana and I will continue doing what we can, working hard to support our family, but there’s only so many things we can control. We’re hoping the worst is over.
—As told to Mathew Silver
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