(NC) The term “house poor” is likely one we’re familiar with as Canadians. Given the ever-changing housing market, it’s something you may even have identified with. But what does it really mean? And how can we avoid it?
“House poor” is a situation that describes a person who “over-extends” themselves and spends an unusually large proportion of his or her total income (roughly 30-40% or more) on home ownership, including mortgage payments, property taxes, maintenance and utilities. If you’re feeling like a disproportionate amount of your income goes towards your home-related expenses, then you might be in this group.
According to the 2019 RBC home ownership poll, half of Canadians claim they would avoid a situation where they become house poor as they say it’s mentally stressful and financially irresponsible.
However, one in four Canadians does identify this way and approximately one in ten is prepared to put themselves in this position....