Toronto Tiktoker Said Buying A House In Ontario's Real Estate Market Is A 'Scam' & Here's Why

"I hate when people say renting is a waste of money."

Associate Editor, Toronto

Jules breaking down costs of buying a home. Right: Houses on residential street.

Are you considering buying a home in Toronto? A recent viral TikTok video by a Toronto-based user sheds light on the hidden costs and staggering expenses involved in investing in Toronto's real estate market , particularly for a $1 million home.

Jules was left shocked after calculating the mortgage interest costs of buying a Toronto home in Ontario's housing market .

"My number one goal in life is to purchase a house, but I think buying a house is a scam," she said.


Comment below if u think mortgages are a scam 😩😩😩 #torontorealestate #torontorentals #torontorentalmarket #torontorentalproperties #torontorealtor #housingcrisis #torontohousingmarket #torontohousingprices

Jules did some math and found out that for a $1 million house at the current interest rate and a 25-year amortization plan, the first-year principal payment would only be $12,000, while the interest paid on the loan in the first year would be $53,000.

So, over the whole repayment of the mortgage, you would end up paying way more in interest than in the actual loan amount � which is not unusual. These numbers, according to Jules, make buying a home in Ontario's real estate market a "scam."

"Their monthly mortgage payment is $5,400. So every single month, you have to come up with $5,400. It's not just like every other month, but every month!" she said.

She compares that cost to her current rent of approximately $20,000 a year or $1,666 per month in Toronto (which she writes part of off as a business expense for her TikTok-based business as a content creator).

She asks whether mortgages are worth it and wonders if investing the same amount of money into the stock market would yield better returns.

Jules' video sparked many heated responses in the comments section, with some users agreeing with her views while others defended the real estate market.

"Buying a house made sense when houses were 200k, not require a 200k down payment," one person commented.

"I hate when people say renting is a waste of money [… ] I need a place to live and simply don’t have $200k in the bank," another said.

But one user thought that Jules' strategy was the problem.

"It might be easier if you start with not a million dollar home as your first home," they wrote.

Home prices in the city have started to slowly correct this year. In February 2023, the average selling price of homes in the Greater Toronto Area fell by almost 18 percent compared to the same month the previous year.

But limited listings available will likely cause more competition between buyers. So, the demand for homes might increase with population growth, but there's also a limited supply of these homes.

Jules' viral video uncovered the harsh truth behind Toronto's cut-throat real estate market, shedding light on the staggering hidden expenses that first-time homebuyers face.

This content is for general informational purposes only and does not constitute financial, investment, legal, tax or accounting advice.

Rhythm Sachdeva
Associate Editor, Toronto
Rhythm Sachdeva is an Associate Editor for Narcity Media Group and is based in Toronto.
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