Fernanda Santos and Gustavo Pereira of London, Ont., knew the housing market was wildly overpriced in March 2022, but felt pressured to become owners, so they bought a three-bedroom home in the east end for $730,000.
“Everybody said to us you should buy as soon as you can — doesn’t matter if you like it or not, just buy and get into the market,” Santos, 34, recalled in an interview with Rebecca Zandbergen, host of CBC Radio’s London Morning.
The couple moved to Canada from Brazil in 2019 for a better life. Today, they’re sitting on a mortgage with a variable rate (currently at 5.6 per cent) on a house that has fallen in value by an estimated $150,000, and paying $4,400 a month — $1,600 more than they had anticipated.
“That’s not what we dreamed about,” said Santos. “It’s just been a nightmare for us.”
As well, housing prices have dropped considerably since the couple bought their home. In fact, sales in January were the lowest for that month since 2009, down 37.1 per cent compared with a year ago, the Canadian Real Estate Association (CREA) said this week.
How the books of Fernanda Santos and Gustavo Pereira look each month:
Graphic shows the monthly salary total and homeownership and other costs for London, Ont., couple Fernanda Santos and Gustavo Pereira. (CBC News)
“They’re just going to raise the rates until they reach a point that they are comfortable with,” said Santos. “But they don’t think about all the people that they are impacting with that.”
Despite both having good jobs, with a combined annual salary of $140,000, Santos and Pereira are struggling to keep up. Both worked as engineers in Brazil. Santos is now a senior estimator with a construction company in London and Pereira is an engineer in training.
“It’s not only the mortgage,” said Santos. “We have property taxes. It’s a huge chunk every single month. We have insurance for the house, insurance for ourselves. So there is a lot of hidden costs.”
The couple are also paying $500 a month towards the cost of home renovations.
On the weekends, the couple’s work isn’t done. Both drive for UberEats and Instacart in an effort to offset their bills.
“When you have like 60 per cent of your full income going toward your mortgage, you pretty much don’t have anything left, plus we have to eat, right?” said Santos.
Santos and Pereira are also using their savings — money they diligently set aside for a rainy day — to buy their groceries.
Advice for homeowners feeling the pinch
Housing analyst John Pasalis, president and a broker at Toronto’s Realosophy Realty Inc., said the couple should go back to their lender (in this case, RMG Mortgages) to see if they can negotiate a lower payment.
One option may be to lengthen the amortization — the amount of time it takes to pay the mortgage off in full — which can come with smaller monthly payment options.
“I think people are reluctant to do that [negotiate], but they need to push,” said Pasalis, adding that lenders seem interested right now in “dampening the shock” of ballooning mortgage payments.
Pereira and Santos now pay $4,400 a month for their mortgage, which amounts to 60 per cent of their salary. (Submitted by Fernanda Santos)
According to Pasalis, many variable-rate mortgage holders are not actually paying more each month.
“The majority of banks do not really increase your payments on your variable mortgage as rates go up,” he said. “Most of them have fixed payments.”
In those cases, more of a person’s mortgage payment goes toward the interest and not the principal, which effectively extends the life of the mortgage.
For now, Santos and Pereira have put their plans to grow their family on pause.
“We had plans in the next couple years, but I can’t go on maternity leave right now,” she said. “If I go on maternity leave, we won’t pay the bills.”
London Morning7:44Are you on a variable mortgage?
If you own a home with a variable rate mortgage, chances are you’re feeling the pinch from rising interest rates.. Fernanda Santos and her husband bought their first home in 2022 and calls the jump in their payments a nightmare.
EDMONTON – RCMP say a second suspect has been arrested in the killing of an Alberta county worker.
Mounties say 28-year-old Elijah Strawberry was taken into custody Friday at a house on O’Chiese First Nation.
Colin Hough, a worker with Rocky View County, was shot and killed while on the job on a rural road east of Calgary on Aug. 6.
Another man who worked for Fortis Alberta was shot and wounded, and RCMP said the suspects fled in a Rocky View County work truck.
Police later arrested Arthur Wayne Penner, 35, and charged him with first-degree murder and attempted murder, and a warrant was issued for Strawberry’s arrest.
RCMP also said there was a $10,000 reward for information leading to the arrest of Strawberry, describing him as armed and dangerous.
Chief Supt. Roberta McKale, told a news conference in Edmonton that officers had received tips and information over the last few weeks.
“I don’t know of many members that when were stopped, fuelling up our vehicles, we weren’t keeping an eye out, looking for him,” she said.
But officers had been investigating other cases when they found Strawberry.
“Our investigators were in O’Chiese First Nation at a residence on another matter and the major crimes unit was there working another file and ended up locating him hiding in the residence,” McKale said.
While an investigation is still underway, RCMP say they’re confident both suspects in the case are in police custody.
This report by The Canadian Press was first published Sept. 13, 2024.
RICHMOND, B.C. – The Integrated Homicide Investigation Team says the 26-year-old son of a man found dead on British Columbia’s Sunshine Coast has been charged with his murder.
Police say 58-year-old Henry Doyle was found badly injured on a forest service road in Egmont last September and died of his injuries.
The homicide team took over when the BC Coroners Service said the man’s death was suspicious.
It says in a statement that the BC Prosecution Service has approved one count of first-degree murder against the man’s son, Jackson Doyle.
Police say the accused will remain in custody until at least his next court appearance.
The homicide team says investigators remained committed to solving the case with the help of the community of Egmont, the RCMP on the Sunshine Coast and in Richmond, and the Vancouver Police Department.
This report by The Canadian Press was first published Sept. 13, 2024.
VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, have broken off without an agreement following 15 hours of talks.
Joe McCann, president of Amalgamated Transit Union Local 1724, says they stayed at the bargaining table with help from a mediator until 2 a.m. Friday and made “some progress.”
However, he says the union negotiators didn’t get an offer that they could recommend to the membership.
McCann says that in some ways they are close to an agreement, but in other areas they are “miles apart.”
About 600 employees of the door-to-door transit service for people who can’t navigate the conventional transit system have been on strike since last week, pausing service for all but essential medical trips.
McCann asks HandyDART users to be “patient,” since they are trying to get not only a fair contract for workers but also a better service for customers.
He says it’s unclear when the talks will resume, but he hopes next week at the latest.
The employer, Transdev, didn’t reply to an interview request before publication.
This report by The Canadian Press was first published Sept. 13, 2024.
