Want to buy a Vancouver home? You need to earn nearly $250,000 a year to afford it

Even though real estate prices have softened in Vancouver this past year, a new report from a mortgage rate comparison organization says the minimum income required to purchase a home has actually gone up.

Ratehub.com says as of August, to pass the mortgage stress test on an average-priced home in Vancouver — $1,208,400 — you have to be making a minimum household income of $246,100.

That figure is up by almost $1,500 since the month before.

Ratehub says the increase in minimum income comes as mortgage rates have risen on a monthly basis, resulting in a prime rate of 7.2 per cent. This means the mortgage stress test has increased to 8.22 per cent, based on a fixed mortgage rate of 6.22 per cent.

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“Borrowers taking out new mortgages, or renewing or refinancing their existing ones with new lenders, must prove they can financially carry their mortgage at this higher threshold, which tacks 2% onto their contract rate,” the organization said.

Following that increase, Vancouver’s affordability has seen the largest drop in the country, Ratehub says.

“In the 10 cities we looked at, average home prices were up in four cities and down in six cities. In Vancouver, despite the average home price decreasing by $2,300, affordability worsened due to the rise in mortgage rates, with $1,480 in additional income required to purchase a home,” said CEO James Laird.

In Toronto, the minimum household income required to buy an average home is just over $233,000, while the cheapest major city analyzed — Winnipeg — requires just $81,000.