The Shift Home

Project > Affordability

What is affordable?

My early lesson in affordability came when I bought my first home in Saskatoon as a 2nd year Engineering student.  I was surprised to learn that, given our limited income, a bigger house listed at $128k was much more affordable than a smaller house listed at $65k.  The difference was due to the two additional rental suites occupying the basement and top floor of the bigger house. Turns out that our monthly cost of living was LESS than our 1 bedroom apartment we previously rented.  That's what I call affordable.


The Shift Home is built around the idea of using the basement as an income producing flexible space (ie. 2 bedroom basement suite, entrepreneurs home office, artist studio, workshop).  By utilizing a direct entry basement (ie. exterior stairs to basement), it transforms the lower level into a very accessible and high quality space that can be used to generate income. 


Let's use a single first time homebuyer as an example, as these individuals usually face the toughest challenge to achieving home ownership.  Consider a person making $35k annually without any other debt visiting their banker for mortgage pre-approval, which indicates the maximum amount of a mortgage that they can qualify for.


Single Family Dwelling

Gross Income                       = $36 000

Monthly Income                   = $3000

Max Mortgage                      = $180 881

Max Monthly Payment        = $790

Monthly Cost to Owner       = $790


The Shift Home with Suite

Gross Income                       = $36 000

Suite Income                         = $750 x 12 = $9000

Total Income                         = $45 000

Monthly Income                   = $3750

Max Mortgage                      = $231 947

Max Monthly Payment        = $1030

Monthly Cost                        = $1030 - 750 = $280


Mortgage Difference           = $51 066

Monthly cash savings         = $510


Mortgages assume 35 yr ammortization, current 5 year rate of 4.25%

Mortgage amount is after downpayment, inclusive of CMHC fees but excludes closing costs.

Qualification performed by Scotiabank's "What can I afford?" online tool


In this example, a buyer with modest income could qualify for a house that is $51k more expensive AND reduce her costs by $510/month.  In my world, that's what I call affordable and that's what the Shift Home is going to opportunity for people of modest incomes to own a high quality home.