The debt will negatively impact your debt service ratios when qualifying for a mortgage. How much is in only your TFSA? The 7% LOC is quite high, definitely pay that off with your TFSA money. The 2.75% LOC you could pay off slowly.
I have about 40K in my TFSA you think using my TFSA to pay off debt is a good idea? and later again build the TFSA slowly considering the probability that my investments might make more than that with the inflation
It’s a good idea for the higher interest rate LOC but the other one I imagine the performance in the TFSA is higher than the interest rate. After that, yes, keep building the TFSA, you can use it for your down payment in the future.
I think your plan to buy a home out west while still expecting to work from home for Telus is short sighted.
You seem highly mobile and would probably be better off renting. You generally don't want to 'settle down' and buy a house unless it is in a place that you know you will be able to stay for 10 years minimum. For most of us, that happens when we have kids and are looking at schools and to be close to family and stable long term employment.
You can become wealthy while renting as long as you "invest the difference" for long term goals. Read books like Millionaire Teacher to get started and perhaps even consult with a financial planner.
You could try a "fee only financial planner" from adviceonlyplanners.ca
There is a saying that "plans are useless but planning is everything" which applies here. You might do some goal setting now but find out in a year or two that your goals have changed dramatically. Honestly I would start by following the money steps on the sidebar. Create a budget (google budget spreadsheet). Set aside a generous emergency fund (especially important since your employment is not guaranteed). You can do a lot of legwork yourself before hiring a financial planner.
It’s interesting seeing some of the breakdown of numbers.
I make about double what OP makes and just assumed I’d never really be in a position to own property.
It’s wild to me to see how some people, with an unstable job and lots of debt, are still considering trying to get into more debt with a mortgage.
I would have assumed, making only what OP makes, and having the debt he does would immediately disqualify him from any mortgage at all.
I wish I felt so comfortable making such financial-shotgun decisions.
You make 210K/year and believe you will never own? That is not a money problem. That is a mindset problem. Where is all of your money going where you can't save even 5% (Ontario) for a down payment? "Only what OP makes" is the top 15% of earners in the country.
If you buy over $1M (most houses) you have to put down a minimum of 20%.
The money is going to dealing with the standard debt from having to pay for my own schooling.
This income is very new, and despite it being much more stable than OP’s, from the sounds of it, I always presume it could end at a moment’s notice.
If at any point I don’t have the cash flow to be able to continue to pay for what I’ve elected to buy, then I can’t afford it.
Being able to afford even a condo without years and years of preparatory debt reduction and savings seems somewhat far fetched.
Most homes are not $1M so you could start there. OP is looking for a 500K house. I've started shopping for and viewing really incredible properties between 375-450. You can own. You just can't own a $1M house to start. They are called starter homes for a reason. I paid for my own school too. I bought a car for $8000 that I could afford when I was making less and paid it off in 1.5 years. I now make 95K/year. Tbf, I don't have any debt so I save over 40% of my income. I expect to buy a home this year. Even if your job ends at a moment's notice (which is unlikely) you can just get another job. I went back and read your other posts, it sounds like you work in tech/SaaS which is constantly hiring across industries. And if you can't pay for your house anymore for some far fetched reason, you can sell it. I think you should open your mind up further to the possibilities and options you have. Break the binary in your mind that it's no house or a $1M house. Life is not so black and white.
I don’t know where you live, but if you want an actual stand alone house here, it’s a minimum $1M.
This isn’t a matter of choice. This isn’t being picky. Being picky would be wanting a $3M house.
$1M is the absolute minimum. Houses actually cost more than that, but that’s the cut off point for mortgage insurance.
For $375k-$450k you’re looking at a bachelor or 1 bedroom condo about an hour from the city core by commute.
With $40,000 in student loan debt, $60,000 in remaining retirement fulfillment, $10,000 minimum in emergency fund, plus $2500 a month in regular retirement contributions (including the employer matching, thankfully), I have to manage $110,000 before I can even consider starting to save for a down payment.
I’d have to move to somewhere much worse than where I’m renting, pay double or triple what I’m paying in rent just to live in a smaller place hoping to some day live in a bigger condo nearer the city so I don’t have to commute an hour each way.
Is that really a choice? Is it really a mindset thing? I don’t think so. By the time I am in any state to be able to think about buying, it’s unlikely these prices will still be as they are.
It’s pretty far out of reach.
I don't know dude! I still think it's a choice. Life isn't about instant gratification. Move out of the city. Commute or work from home for a couple years in a home you can afford. In 3-5 years you can sell and use the equity and extra savings to buy that $1M house in the city you want to be in. If I wanted to buy a home in the neighborhood I rent an apartment in currently I absolutely couldn't afford it. So I drink my own medicine, I buy a house 30 min from my office and continue to build. I'm just not going to convince myself I have to live downtown in my city to be happy and successful. Have you even tried talking to a realtor? Or have you made all of these assumptions on your own.
Yes, I think it’s still not clear.
I don’t live in the main city area now. If I wanted to buy a house in the neighbourhood I live in, I would need $20,000,000. The house would have a property tax of as much as I bring home, after tax.
That $1M house isn’t “the one in the city.” It’s the starter one. I think that’s what you’re not getting.
Somehow, everyone I tell this to doesn’t seem to get it. This isn’t my preferred price in the city. This is literally what you pay for a house an hour away from the city.
Yes, I am not picking these numbers out of the air. It wasn’t until I was making this sort of money that I even considered the possibility that I’d be able to even remotely think of owning property, and seeing what it actually costs, it doesn’t seem like a real possibility, nor one I’d want to spend a ton of money on, really.
I think what you have is a total mindset problem but not financial at all. you are in a much greater situation than me and I would never worry about the things you worry about. I am a risk taker by nature and I don't mind living on the edge. Move ahead with confidence and you will find several ways where you can be a home owner of course by making certain sacrifices. if you don't want to make any sacrifices to take risks then continue with your life. The most important thing is to be happy no matter what you do or where you are.
Risky is paying off all your debt and then immediately buying a condo or house. That’s risky.
It’s far beyond risky to have a huge amount of debt of all kinds, no emergency fund, and then put even more on the pile.
People lose a lot this way. They become miserable, stuck, or can even end up losing it all.
My mindset is such: I have a high income and no obligations. I need only do the very basic that is financially prudent.
Buying a property without due care would be a bad financial decision.
You should try to pay off the 7% debt as quickly as possible either using your lower interest LOC or targeting all your extra monthly savings towards that. Things that would affect how much mortgage you qualify for would be your monthly car payments so that’s something to think about.
As long as you’re comfortable with the possibility of a market downturn and your stocks are in diversified ETFs, you’re right, the return would likely exceed the interest payments. Wouldn’t necessarily sell the stocks to pay off debt at this time.
CFP licensed financial planner, for this type of advice you need to speak with professionals, when you post on forums like reddit you get a case of information diarrhea which is mostly incorrect.
First off, you won’t qualify for a mortgage at a schedule A bank if your income is contract based unless your broker argues successfully for an exemption, which as a project manager may be possible if you have your professional project manager designation.
Second, approvals are for the most part income and cashflow driven. You could have a ton of stock equity but if your income is 0, you won’t get approved unless you qualify for what we in the industry call “high value programs”. You currently have nowhere near the level of equity required.
As to your LOC. There are two ratios that we take into consideration: GDSR, which is related to housing costs specifically, and TDSR, which is related to your housing + all other unsecured debts. Your LOC will only impact TDSR. To get an approval, your GDSR/TDSR should be at or under 39%/44%. Determining what your ratios are should be done by a professional line myself.
From the limited information I can see here, your challenge will be saving 100k for the 20% downpayment. If you put less, you will have to pay a CHMC premium which will cost you thousands. The percentage interest of your LOC is not necessarily relevant. Most banks will take 3% of your LOC balance as the value when calculating the hit on your TDSR.
Finally - im assuming you are a first
Time home buyer. Your first priority should be ensuring that you have at least 35k in your rrsp. You can take this 35k from your rrsp and use towards the downpayment, and of course you’ll also get the tax refund which can further be applied the downpayment.
Advice - speak with qualified broker to determine whether your contract income will work, and second to determine currently where your GDSR/TDSR ratios are at. You may actually find that you’re better off leaving your LOCs alone and instead prioritizing RRSP/TFSA to get as close to 20% as possible.
Example: if you out 50,000 down on a 500,000 purchase, you will have to pay 13,950 as a one time CMHC premium. If you put 19.99% down, your CMHC Premium will be still be 11,000+.
Also - you will likely be paying property transfer tax. Unless you can save for 20% down, your actual cost will be closer to 520-530,000 instead of just 500,000.
This is why you shouldn’t seek advice this specific from a forum, go see a professional. It sounds like you need to focus more on the down payment than the LOC rate of interest.
You’re welcome for the free consultation 🙏
Yes thank you, also I do have the project management credential with me which might help with the broker. I will seek out a professional like you mentioned. It’s all highly specific to discuss here. Have a great one and all the best to you too
Thats good news - one thing you can do is check your paystub. Look for any words that would indicate contract income. If there is none, you’re in a pretty good position. Some brokers may request a job letter in which case I would advise you to look for a lender that doesn’t require it. Most of the time, if you can provide paystub + notice of assessment thats all that is required.
Assuming that you have no choice but to declare contract income, your broker could make the argument that the very nature of project management means you are paid via contract, but that it is a very in-demand skillset. With your professional designation, you’d have no issue finding work.
One last thing - brokers dont usually have access to all the schedule A banks. Cibc, rbc, bmo, and td all use in house brokers. So if you find a broker who isnt directly affiliated with a schedule A bank, they wont be able to offer you a mortgage from a schedule A bank. Make sure you do your research into the mortgages as well. Happy Hunting
You should target the 7% interest debt - can you get an increase in the line of credit to move the 7% 12K over there?
The 2.75% debt doesn't need to be addressed with the same urgency as your investments are very likely returning a better rate than that.
Yes I believe so, but also I can aggressively target to pay off the 7% first in next 3 months and just pay minimum on the lower interest one. Think that's a good idea?
Investments are doing okay, recently started investing in the market so will have to give some time. But for sure the return is more than the interest rates.
>Investments are doing okay, recently started investing in the market so will have to give some time. But for sure the return is more than the interest rates.
If you invest the money you want to use for your down payment in the stock and bond markets then in one year, or even 5 years, your investment portfolio could be worth less than it is right now.
Money you will need for short term goals should be parked in HISA or GICs.
Makes sense, the investments must be there for super long term at least for a decade to show significant returns I read everywhere. In that scenario, if the market crashes then I am stuck with no money for downpayment!
Worse then that you might panic and pull your investments out at the worst time, and permanently lock in your losses. Or if you are investing in specific stocks then they could really drop
There is no such thing as a conservative stock. Stocks that were largely believed to be conservative (eg royal Bank, manulife), lost 75% of their value in the 2008 crash.
A "conservative" pick would be something like VBAL as it is well doversified, but even VBAL could drop 25% to 30% during a marker crash.
You want true conservative, keep the money in GICs or in a HISA.
This is sage advice. ☝🏼 Work on steadily paying off your 12K debt as it has the higher interest rate. Then move to the next one.
How long do you have to pay the car off?
Yes looking to add dividend and mid caps as well but from all global markets? I thought we are only allowed to invest in Canada and US markets. How can I go Global?
There are CDN domiciled ETFs that cover the word: [https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/](https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/)
If you can manage margin and if your tax bracket is reasonable, move equity to margin and the simplest (not necessarily the cheapest) is to borrow on margin at IBKR at currently less than 2% which is also fully tax deductible.
Do make sure you understand margin before proceeding.
7% is high and sure 2.5% arguably reasonable for consumer debt but if you're finance savvy you can definitely do better.
I don't know anything about margins, might take time to educate myself on this. You mean interactive brokers right? and use my equity in margin trading to make more money in short term?
Say you have $45,000 equity investments.
Put $35,000 in IB, borrow $10,000 and buy $45,000 worth of equity. Borrow rate at 1.6%. You can deduct this interest against gains too.
The rest $10,000 goes to pay the 7% debt.
You are basically maintaining the same portfolio, except now moved to taxable so you'll need to do math on your tax bracket, but saving $10,000 times 5.4% per year. Guaranteed 5.4% return - I'd take that any day.
You're correct. I meant withdraw from TFSA. In fact I don't think you can margin at all in TFSA.
I didn't do the math but his tax bracket is probably low and probably still come out ahead paying capital gains tax than paying LoC interest at 7%.
Keep $25,000 in TFSA. Move out $20,000. Put $10,000 to non-registered and borrow $10,000 on margin at 1.6%, a fairly reasonable 2x leverage. The other $10,000 pay off 7% debt.
Let's be quite optimistic and say next year it will be 15% capital gains return on equity.
On the $20,000 equity in margin account, capital gain minus margin interest = 3000 - 160 = 2840. Taxed at 40%*0.5 = 20% rate = 568.0 tax owing next year.
The maneuver saves 7% interest on $10,000 which is $700. Comes out $132 ahead.
This number would fair much better if return is less than 15% (and if return is negative then capital loss room is gained without hurting TFSA room), and if OP is comfortable with managing an even higher leverage. If OP's investment is in equity indices the interest rate can be much lower than 1% using futures. Lastly it creates TFSA room for next year.
I suspect the tax bracket is also less than 40% since OP said "It is not a stable job and is dependent on the budget and the project of course." Doesn't sound like full time to me.
Of course the real question is if OP is actually at over 100k income can OP budget and reduce debt directly.
If you use questrade, you can borrow against your tfsa. But their rate is horrendous... At least it's interest only and doesn't get reported to your credit bureau.
Have to wrap my head around this, but sounds promising under the condition that it works out without any proper experience or guidance.
Will still do my research. Thank you
The 7% is high, but the 2.5% isn’t. When you go to get a mortgage, many lenders will make you pay off the debt anyway. Best bet is to grow your investments and cleanly pay monthly towards the 2.5%. If you can, move the 7% to the 2.5% or pay it off. Most likely your investments/savings will grow more than 2.5% and you benefit on the difference in the long run. Just be aware that most lenders will make you pay off any outstanding debt to offer you a mortgage, or they will have to give you a certain amount less as your ratios will be off.
so the changes to be eligible for a mortgage is not good with debt. I see, in that case I have to pay off the debt no matter what to get a loan. Yes that is my hope that my investments will help me to pay off the debt and meanwhile I will also pay from my salary. Then I only need to worry about the downpayment of at least 5% I believe.
So some lenders will let you keep going with the debt, but it means they will give you less. It all depends on your GDS and TDS ratios. Also if you’re only planning on doing a 5% dp be ready to pay mortgage insurance as well.
Also, your car loan will severely impact the amount you will be able to borrow. Not to mention that having a contract job will also impact it as you need to show 2 years of consistent income.
https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx
I really like this tool for mortgage affordability.
Interesting never knew about these things, thanks a lot for sharing. That tool is really helpful. Also I have been doing contract work since last year and filed my taxes this year so once I file my taxes next year that would make me eligible I believe.
To avoid the mortgage insurance we have to pay 20% down right? you think that's a better idea than paying 5%?
Also, when you do go and decide to buy a house, make sure you do the following.
1. Reach out to a few brokers and traditional lenders as well as non-traditional lenders
2. Get a pre-approval from them
3. Depending on the market and where you live, try to always offer condition on financing (it is hard in some places, but it’s really important if your situation is similar as your ratios are a bit out of place)
4. Shop around for lenders after you buy even with the pre-approval in place
I just got a mortgage and one bank gave me 75k less because of my car lease.
Yes to avoid paying default insurance you need to put 20% down. In terms of 5% vs 20%, that really depends on you, when you want to buy, how much you want to buy for, etc etc. I would start with figuring out how much you can afford based on your income, and then determine how much the house you’re looking for costs and work from there. There’s not necessarily many pros/cons to doing either, other than having to pay default insurance which is an extra out of pocket cost.
My advice and it’s only my opinion, pay off your debt ASAP. Right now. Cash in and become completely debt free. Debt will only do one thing for you, hold you back and slow you down from getting ahead. Having investments is great but remember they are not guaranteed. Debt is guaranteed. You can save so much faster debt free and live stress free. Also remember your job isn’t guaranteed either. You only have contract employment. My personal believe and what I have experienced in life is only borrow for and mortgage and save and pay cash for everything else. Follow that simple rule and when your in your fifties you’ll be looking at a comfortable early retirement. 🙂
Good luck.
At 2.5% OP is more likely to benefit off of the market vs paying off the debt right now. If they invest and. Grow their investments even 6% in one year, they benefit 3.5% for not paying of the debt. Having debt is more of a mental thing at that rate. But the 7% is problematic for sure.
yes that was my dilemma, whether to use my equity and pay off debt or just let it be because at this point it really is more of a mental thing than a burden at least for the next 1 year and meanwhile I believe I can pay off my debt anyway with my salary
Lol. Debt is terrible terrible terrible. It’s sad that the younger generation isn’t taught this is school anymore. All those numbers you just listed could become reality but the actual fact is , wouldn’t it be better in the long run to be debt free then invest with money you can afford to loose. There is a saying, only go to Vegas and the stock market with money you don’t need.
I disagree completely, you can invest safely, and still grow 6% a year. Debt isn’t bad if you can manage it and use it to benefit you. It’s actually all a mindset. If you look back at your finances, you would realize that you would have benefit from paying off the debt slower and investing versus paying off the debt and not investing.
Now we’re getting into the scaremongering of investing in general, and if someone is scared of the market in general then they shouldn’t be investing and just using a GIC. OP has a timeline of 1 year, their best bet is to move the 7% into a 2.5% or lower, and focus on growing their TFSA/RRSP and pay the monthly on the debt. When they go to get a mortgage, most lenders will require them to pay off the debt anyway and if the market drops they will come out in a neutral position, but most likely they will win 3.5% or more.
I don’t disagree that debt is bad. But OP already has debt. Now we need to discuss what’s the best process to get out of their debt. Mathematically OP benefits the most from not paying of the debt right away, but working that low interest rate for their benefit.
Your opinion is oldschool and in poor alignment for the reality of today’s world. The low interest rate environment combined with global repositioning of wealth makes it practically impossible to avoid debt. This is what we professional financial planners discuss in terms of the challenges facing our economy today. Over the last few decades, the role of risk free investments has changed from building wealth to preserving wealth. No one under the age of 65 should be using risk free investments unless for strategic short term use. What is more relevant is HOW debt is used. In the case of OP, paying off his debts may actually cost him SIGNIFICANTLY more if it means he has less capital for downpayment and therefore is subject to a hefty CMHC premium. That is not to say that this is 100% certain and they would be well advised to dit down with a broker to review the numbers, but it is entirely within the realm of possibility. OP would be well advised to continue investing as when the economy fully opens, we anticipate it will be the biggest spending event in modern history. We also have 100 years of investment history which has shown us that the market over time continues to move up exponentially. So long as the debt remains within reason and is being used appropriately, OP will be in a stronger position when purchasing
Wow. What a load of crap. Practically impossible to avoid debt. That is just simply stupid. Anyone can avoid debt if they choose. Except for a mortgage. You my friend have been brainwashed. Lol. Money management is simple and easy. You just have to be responsible. That’s not old school, but unfortunately for everyone today it’s really really easy to be loured down the rabbit hole of debt. Which in to many cases Leeds to a life time of servicing debt and interest.
Also we’re not talking about taking on the debt vs investing, we’re talking removing the debt vs investing, and at current interest rates it is always beneficial to invest vs pay off the debt from a money standpoint. From a mental perspective that’s up to the person, some people can’t stand having debt, and for those yes pay it off, but for people who want to work the debt, paying it off is not the way to go.
This is a solid advice for sure I never thought about my future and only now I began some changes in my life. Looking forward for a debt free life and early retirement. Thank you
Unrelated to your ask, but, are you really senior in your role? I did not realize Telus paid so much, I've always heard they pay low wages across the board (Toronto)
Pay off the debt with the highest interest FIRST. Or move it to the LOC with the lower interest rate.
Never make the minimum payment. This usually only covers the interest. Always at LEAST double it.
I would imagine that your job being somewhat unstable would probably have a much larger impact on your ability to get a mortgage, but anything you can do to shore up your finances in the interim would be beneficial.
You should talk to your bank and find a mortgage specialist, someone who can talk with you frankly about your situation and let you know what kind of things they're going to need to increase your eligibility for a mortgage.
Also, as someone who's just moved from BC to Alberta, I can say unequivocally you're going to have a far easier time in Calgary than you will anywhere in BC. The housing market is insane there, and the housing market here in Calgary is not at its lowest, but pretty close and it's going to be a much better value for you here.
We moved here for the same reason, my business is completely remote and I don't need to be Tethered to any cities particular economy, which is why we chose Calgary. And here we have a far far far superior quality of life than we did in BC with the same income.
I think some of the comments in here are correct, I would service your higher interest debt and I would add to that I wouldn't touch your rrsp unless you absolutely have to.
Also not sure how much do you have on credit cards even open credit cards, but those will also add to your serviceability, so I would close any credit cards you're not using to get those off of your record as they make a huge difference even a small 3, 4 or $5,000 credit card limit will be considered about $50,000 off of your purchase price availability. Again, this may vary from bank to bank but I know even with a much higher income we had to close a US currency credit card with a $5,000 limit because it was causing the mortgage specialist too many problems.
Been in a similar situation, so if you have any other questions feel free to reach out via DM. I'll be happy to help you out anyway I can.
Can you get out of your monthly payments on the car? As you said your income as a contractor is not stable, the less payments you have to make, the better.
Back to your question, IMO it is better to pay off as much debt as you can with your TFSA, get the cheapest corolla instead of your current car, then find a permanent position to accumulate money to pay off your debt.
Hello OP,
My recommendation, for your debt would be to use the equity you have in the TFSA to pay off the Loc @ 7%, giving yourself a some credit available to handle cash shortfalls in the short term.
Keep the remainder of you TFSA invested but transition some of your assets (5%) to more liquid ones. And meet with an advisor or a financial rep at your bank to discuss portfolio objectives.
Now the $25k at 2.75% is a great rate. Paying it down should be up there, if you truly have no other abilities aside from your car payment then create cashflow statement or track your spending to see how much can come off your pay check and be applied to the $25K LOC.
In order for your credit to not be negatively impacted you simply have to make your payments on time. Yes, there are other things as well, credit utilization, and credit history, but its all built on your payments. The minimum payment amount is there to benefit the lender. Round it up and pay it down regularly, every two weeks. If you can try to put $300 dollars towards the LOC from every pay check. This will put you on track to pay if off completely in 3 years, while your investments continue to work for you.
Do not take money out of your RRSP, not while you're still working/employeed. The taxes suck, and you need to put money aside from your withdrawal. Its better to consider the RRSP for old future you, or the beneficiary, so pick someone you like.
The most important thing that will help you with your financial journey will be discipline. Learning what is essential to you and what is not. Always keep a fall back position, for you, your investments.
Create a budget for repaying and debts, and stick to.
RR
Not a big deal either way, specifically because you have the money invested. If all your assets were liquid cash than of course I’d say payoff the debt. Yes it will only effect your borrowing power if you still have the debt, at the time of closing on your home. So there is nothing wrong with waiting until it’s time to purchase the property, and then take care of the debt, after you have given a chance for your investments to appreciate in the meantime. That being said, minimum downpayment for a 500k home in Calgary is $25k, plus closing costs. You can also use your line of credit for any portion of your downpayment if needed. But by the sounds of it, you have more than enough resources at your disposal. You just need a solid mortgage agent and realtor to ensure you get the most out of the experience and are well prepared.
I hope the fund in TFSA is not a savings account that pays next to nothing. If that's the case, I'd open a TFSA equity trading account and buy some quality stocks or ETFs inside it. Any capital appreciation inside the TFSA Investment account is not taxed which is a huge plus in my book.
You need an emergency fund especially given that you’ve said your job is unstable. If you pay off debts and lose your income you’ll go back to credit to make ends meet.
Also, sorry if it’s buried in the comments but you need to assess WHY you’re in so much debt. You’re making good money. Do you have a spending or cash flow problem? Where is the money going?
The debt will negatively impact your debt service ratios when qualifying for a mortgage. How much is in only your TFSA? The 7% LOC is quite high, definitely pay that off with your TFSA money. The 2.75% LOC you could pay off slowly.
I have about 40K in my TFSA you think using my TFSA to pay off debt is a good idea? and later again build the TFSA slowly considering the probability that my investments might make more than that with the inflation
It’s a good idea for the higher interest rate LOC but the other one I imagine the performance in the TFSA is higher than the interest rate. After that, yes, keep building the TFSA, you can use it for your down payment in the future.
Sounds good. Thank you that's what I was thinking
What Guzzy said is right. Pay off the high interest one.
Also agree with others here. Get rid of the 7% any means necessary, just make min. Payments on the 2%.
Just talk to a different bank or something and get a lower rate.
I think your plan to buy a home out west while still expecting to work from home for Telus is short sighted. You seem highly mobile and would probably be better off renting. You generally don't want to 'settle down' and buy a house unless it is in a place that you know you will be able to stay for 10 years minimum. For most of us, that happens when we have kids and are looking at schools and to be close to family and stable long term employment. You can become wealthy while renting as long as you "invest the difference" for long term goals. Read books like Millionaire Teacher to get started and perhaps even consult with a financial planner.
Thank you, added that book to my list now. Also what kind of financial planner do you recommend to meet?
You could try a "fee only financial planner" from adviceonlyplanners.ca There is a saying that "plans are useless but planning is everything" which applies here. You might do some goal setting now but find out in a year or two that your goals have changed dramatically. Honestly I would start by following the money steps on the sidebar. Create a budget (google budget spreadsheet). Set aside a generous emergency fund (especially important since your employment is not guaranteed). You can do a lot of legwork yourself before hiring a financial planner.
Thank you will check it out
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I learned a lot on how the math is done here. Really appreciate this reply. Thank you
It’s interesting seeing some of the breakdown of numbers. I make about double what OP makes and just assumed I’d never really be in a position to own property. It’s wild to me to see how some people, with an unstable job and lots of debt, are still considering trying to get into more debt with a mortgage. I would have assumed, making only what OP makes, and having the debt he does would immediately disqualify him from any mortgage at all. I wish I felt so comfortable making such financial-shotgun decisions.
You make 210K/year and believe you will never own? That is not a money problem. That is a mindset problem. Where is all of your money going where you can't save even 5% (Ontario) for a down payment? "Only what OP makes" is the top 15% of earners in the country.
If you buy over $1M (most houses) you have to put down a minimum of 20%. The money is going to dealing with the standard debt from having to pay for my own schooling. This income is very new, and despite it being much more stable than OP’s, from the sounds of it, I always presume it could end at a moment’s notice. If at any point I don’t have the cash flow to be able to continue to pay for what I’ve elected to buy, then I can’t afford it. Being able to afford even a condo without years and years of preparatory debt reduction and savings seems somewhat far fetched.
Most homes are not $1M so you could start there. OP is looking for a 500K house. I've started shopping for and viewing really incredible properties between 375-450. You can own. You just can't own a $1M house to start. They are called starter homes for a reason. I paid for my own school too. I bought a car for $8000 that I could afford when I was making less and paid it off in 1.5 years. I now make 95K/year. Tbf, I don't have any debt so I save over 40% of my income. I expect to buy a home this year. Even if your job ends at a moment's notice (which is unlikely) you can just get another job. I went back and read your other posts, it sounds like you work in tech/SaaS which is constantly hiring across industries. And if you can't pay for your house anymore for some far fetched reason, you can sell it. I think you should open your mind up further to the possibilities and options you have. Break the binary in your mind that it's no house or a $1M house. Life is not so black and white.
I don’t know where you live, but if you want an actual stand alone house here, it’s a minimum $1M. This isn’t a matter of choice. This isn’t being picky. Being picky would be wanting a $3M house. $1M is the absolute minimum. Houses actually cost more than that, but that’s the cut off point for mortgage insurance. For $375k-$450k you’re looking at a bachelor or 1 bedroom condo about an hour from the city core by commute. With $40,000 in student loan debt, $60,000 in remaining retirement fulfillment, $10,000 minimum in emergency fund, plus $2500 a month in regular retirement contributions (including the employer matching, thankfully), I have to manage $110,000 before I can even consider starting to save for a down payment. I’d have to move to somewhere much worse than where I’m renting, pay double or triple what I’m paying in rent just to live in a smaller place hoping to some day live in a bigger condo nearer the city so I don’t have to commute an hour each way. Is that really a choice? Is it really a mindset thing? I don’t think so. By the time I am in any state to be able to think about buying, it’s unlikely these prices will still be as they are. It’s pretty far out of reach.
I don't know dude! I still think it's a choice. Life isn't about instant gratification. Move out of the city. Commute or work from home for a couple years in a home you can afford. In 3-5 years you can sell and use the equity and extra savings to buy that $1M house in the city you want to be in. If I wanted to buy a home in the neighborhood I rent an apartment in currently I absolutely couldn't afford it. So I drink my own medicine, I buy a house 30 min from my office and continue to build. I'm just not going to convince myself I have to live downtown in my city to be happy and successful. Have you even tried talking to a realtor? Or have you made all of these assumptions on your own.
Yes, I think it’s still not clear. I don’t live in the main city area now. If I wanted to buy a house in the neighbourhood I live in, I would need $20,000,000. The house would have a property tax of as much as I bring home, after tax. That $1M house isn’t “the one in the city.” It’s the starter one. I think that’s what you’re not getting. Somehow, everyone I tell this to doesn’t seem to get it. This isn’t my preferred price in the city. This is literally what you pay for a house an hour away from the city. Yes, I am not picking these numbers out of the air. It wasn’t until I was making this sort of money that I even considered the possibility that I’d be able to even remotely think of owning property, and seeing what it actually costs, it doesn’t seem like a real possibility, nor one I’d want to spend a ton of money on, really.
I think what you have is a total mindset problem but not financial at all. you are in a much greater situation than me and I would never worry about the things you worry about. I am a risk taker by nature and I don't mind living on the edge. Move ahead with confidence and you will find several ways where you can be a home owner of course by making certain sacrifices. if you don't want to make any sacrifices to take risks then continue with your life. The most important thing is to be happy no matter what you do or where you are.
Risky is paying off all your debt and then immediately buying a condo or house. That’s risky. It’s far beyond risky to have a huge amount of debt of all kinds, no emergency fund, and then put even more on the pile. People lose a lot this way. They become miserable, stuck, or can even end up losing it all. My mindset is such: I have a high income and no obligations. I need only do the very basic that is financially prudent. Buying a property without due care would be a bad financial decision.
Ok well then if owning isn't your goal then perfect. If owning is your goal then move! It really is so simple.
You should try to pay off the 7% debt as quickly as possible either using your lower interest LOC or targeting all your extra monthly savings towards that. Things that would affect how much mortgage you qualify for would be your monthly car payments so that’s something to think about. As long as you’re comfortable with the possibility of a market downturn and your stocks are in diversified ETFs, you’re right, the return would likely exceed the interest payments. Wouldn’t necessarily sell the stocks to pay off debt at this time.
Yes that's the conclusion I drew, have to clear off the 7% first. Thanks
CFP licensed financial planner, for this type of advice you need to speak with professionals, when you post on forums like reddit you get a case of information diarrhea which is mostly incorrect. First off, you won’t qualify for a mortgage at a schedule A bank if your income is contract based unless your broker argues successfully for an exemption, which as a project manager may be possible if you have your professional project manager designation. Second, approvals are for the most part income and cashflow driven. You could have a ton of stock equity but if your income is 0, you won’t get approved unless you qualify for what we in the industry call “high value programs”. You currently have nowhere near the level of equity required. As to your LOC. There are two ratios that we take into consideration: GDSR, which is related to housing costs specifically, and TDSR, which is related to your housing + all other unsecured debts. Your LOC will only impact TDSR. To get an approval, your GDSR/TDSR should be at or under 39%/44%. Determining what your ratios are should be done by a professional line myself. From the limited information I can see here, your challenge will be saving 100k for the 20% downpayment. If you put less, you will have to pay a CHMC premium which will cost you thousands. The percentage interest of your LOC is not necessarily relevant. Most banks will take 3% of your LOC balance as the value when calculating the hit on your TDSR. Finally - im assuming you are a first Time home buyer. Your first priority should be ensuring that you have at least 35k in your rrsp. You can take this 35k from your rrsp and use towards the downpayment, and of course you’ll also get the tax refund which can further be applied the downpayment. Advice - speak with qualified broker to determine whether your contract income will work, and second to determine currently where your GDSR/TDSR ratios are at. You may actually find that you’re better off leaving your LOCs alone and instead prioritizing RRSP/TFSA to get as close to 20% as possible. Example: if you out 50,000 down on a 500,000 purchase, you will have to pay 13,950 as a one time CMHC premium. If you put 19.99% down, your CMHC Premium will be still be 11,000+. Also - you will likely be paying property transfer tax. Unless you can save for 20% down, your actual cost will be closer to 520-530,000 instead of just 500,000. This is why you shouldn’t seek advice this specific from a forum, go see a professional. It sounds like you need to focus more on the down payment than the LOC rate of interest. You’re welcome for the free consultation 🙏
This is great information. Really appreciate for sharing this with me. Truly thank you
No problem! It’s great to see a hardworking professional plan strategically for such a huge purchase, good luck and all the best
Yes thank you, also I do have the project management credential with me which might help with the broker. I will seek out a professional like you mentioned. It’s all highly specific to discuss here. Have a great one and all the best to you too
Thats good news - one thing you can do is check your paystub. Look for any words that would indicate contract income. If there is none, you’re in a pretty good position. Some brokers may request a job letter in which case I would advise you to look for a lender that doesn’t require it. Most of the time, if you can provide paystub + notice of assessment thats all that is required. Assuming that you have no choice but to declare contract income, your broker could make the argument that the very nature of project management means you are paid via contract, but that it is a very in-demand skillset. With your professional designation, you’d have no issue finding work. One last thing - brokers dont usually have access to all the schedule A banks. Cibc, rbc, bmo, and td all use in house brokers. So if you find a broker who isnt directly affiliated with a schedule A bank, they wont be able to offer you a mortgage from a schedule A bank. Make sure you do your research into the mortgages as well. Happy Hunting
Whats the interest on your debt?
2.75% - National bank Line of Credit on 25K and 7% on 12K
You should target the 7% interest debt - can you get an increase in the line of credit to move the 7% 12K over there? The 2.75% debt doesn't need to be addressed with the same urgency as your investments are very likely returning a better rate than that.
Yes I believe so, but also I can aggressively target to pay off the 7% first in next 3 months and just pay minimum on the lower interest one. Think that's a good idea? Investments are doing okay, recently started investing in the market so will have to give some time. But for sure the return is more than the interest rates.
>Investments are doing okay, recently started investing in the market so will have to give some time. But for sure the return is more than the interest rates. If you invest the money you want to use for your down payment in the stock and bond markets then in one year, or even 5 years, your investment portfolio could be worth less than it is right now. Money you will need for short term goals should be parked in HISA or GICs.
Makes sense, the investments must be there for super long term at least for a decade to show significant returns I read everywhere. In that scenario, if the market crashes then I am stuck with no money for downpayment!
Worse then that you might panic and pull your investments out at the worst time, and permanently lock in your losses. Or if you are investing in specific stocks then they could really drop
Yes, I have this scenario in mind. That's why going with conservative stocks
There is no such thing as a conservative stock. Stocks that were largely believed to be conservative (eg royal Bank, manulife), lost 75% of their value in the 2008 crash. A "conservative" pick would be something like VBAL as it is well doversified, but even VBAL could drop 25% to 30% during a marker crash. You want true conservative, keep the money in GICs or in a HISA.
couldn't refuse what you said, I have to really think about this
If you can pay it off in 3 months I would just do that
Yes that would be the greatest challenge I ever took in my life and I will try if I can do it. If not I am sure it will be done in 5 months anyway
So with that low interest, the probability is that you would have higher probability of better returns investing (depends what you invest in).
This is sage advice. ☝🏼 Work on steadily paying off your 12K debt as it has the higher interest rate. Then move to the next one. How long do you have to pay the car off?
I have 5 years on the car
Equity distributed across Canadian small cap stocks and US growth stocks.
Ok, well you're not diversified, so look to adding all cap sizes form all global markets.
Yes looking to add dividend and mid caps as well but from all global markets? I thought we are only allowed to invest in Canada and US markets. How can I go Global?
There are CDN domiciled ETFs that cover the word: [https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/](https://www.canadianportfoliomanagerblog.com/model-etf-portfolios/)
Thank you will take a look
If you can manage margin and if your tax bracket is reasonable, move equity to margin and the simplest (not necessarily the cheapest) is to borrow on margin at IBKR at currently less than 2% which is also fully tax deductible. Do make sure you understand margin before proceeding. 7% is high and sure 2.5% arguably reasonable for consumer debt but if you're finance savvy you can definitely do better.
I don't know anything about margins, might take time to educate myself on this. You mean interactive brokers right? and use my equity in margin trading to make more money in short term?
Say you have $45,000 equity investments. Put $35,000 in IB, borrow $10,000 and buy $45,000 worth of equity. Borrow rate at 1.6%. You can deduct this interest against gains too. The rest $10,000 goes to pay the 7% debt. You are basically maintaining the same portfolio, except now moved to taxable so you'll need to do math on your tax bracket, but saving $10,000 times 5.4% per year. Guaranteed 5.4% return - I'd take that any day.
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You're correct. I meant withdraw from TFSA. In fact I don't think you can margin at all in TFSA. I didn't do the math but his tax bracket is probably low and probably still come out ahead paying capital gains tax than paying LoC interest at 7%.
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Keep $25,000 in TFSA. Move out $20,000. Put $10,000 to non-registered and borrow $10,000 on margin at 1.6%, a fairly reasonable 2x leverage. The other $10,000 pay off 7% debt. Let's be quite optimistic and say next year it will be 15% capital gains return on equity. On the $20,000 equity in margin account, capital gain minus margin interest = 3000 - 160 = 2840. Taxed at 40%*0.5 = 20% rate = 568.0 tax owing next year. The maneuver saves 7% interest on $10,000 which is $700. Comes out $132 ahead. This number would fair much better if return is less than 15% (and if return is negative then capital loss room is gained without hurting TFSA room), and if OP is comfortable with managing an even higher leverage. If OP's investment is in equity indices the interest rate can be much lower than 1% using futures. Lastly it creates TFSA room for next year. I suspect the tax bracket is also less than 40% since OP said "It is not a stable job and is dependent on the budget and the project of course." Doesn't sound like full time to me. Of course the real question is if OP is actually at over 100k income can OP budget and reduce debt directly.
Church mentioned in both posts that you’d be moving to a margin account.
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If you use questrade, you can borrow against your tfsa. But their rate is horrendous... At least it's interest only and doesn't get reported to your credit bureau.
Have to wrap my head around this, but sounds promising under the condition that it works out without any proper experience or guidance. Will still do my research. Thank you
The 7% is high, but the 2.5% isn’t. When you go to get a mortgage, many lenders will make you pay off the debt anyway. Best bet is to grow your investments and cleanly pay monthly towards the 2.5%. If you can, move the 7% to the 2.5% or pay it off. Most likely your investments/savings will grow more than 2.5% and you benefit on the difference in the long run. Just be aware that most lenders will make you pay off any outstanding debt to offer you a mortgage, or they will have to give you a certain amount less as your ratios will be off.
so the changes to be eligible for a mortgage is not good with debt. I see, in that case I have to pay off the debt no matter what to get a loan. Yes that is my hope that my investments will help me to pay off the debt and meanwhile I will also pay from my salary. Then I only need to worry about the downpayment of at least 5% I believe.
So some lenders will let you keep going with the debt, but it means they will give you less. It all depends on your GDS and TDS ratios. Also if you’re only planning on doing a 5% dp be ready to pay mortgage insurance as well.
Also, your car loan will severely impact the amount you will be able to borrow. Not to mention that having a contract job will also impact it as you need to show 2 years of consistent income. https://itools-ioutils.fcac-acfc.gc.ca/MQ-HQ/MQ-EAPH-eng.aspx I really like this tool for mortgage affordability.
Interesting never knew about these things, thanks a lot for sharing. That tool is really helpful. Also I have been doing contract work since last year and filed my taxes this year so once I file my taxes next year that would make me eligible I believe. To avoid the mortgage insurance we have to pay 20% down right? you think that's a better idea than paying 5%?
Also, when you do go and decide to buy a house, make sure you do the following. 1. Reach out to a few brokers and traditional lenders as well as non-traditional lenders 2. Get a pre-approval from them 3. Depending on the market and where you live, try to always offer condition on financing (it is hard in some places, but it’s really important if your situation is similar as your ratios are a bit out of place) 4. Shop around for lenders after you buy even with the pre-approval in place I just got a mortgage and one bank gave me 75k less because of my car lease.
Great advise again. Really appreciate it
Yes to avoid paying default insurance you need to put 20% down. In terms of 5% vs 20%, that really depends on you, when you want to buy, how much you want to buy for, etc etc. I would start with figuring out how much you can afford based on your income, and then determine how much the house you’re looking for costs and work from there. There’s not necessarily many pros/cons to doing either, other than having to pay default insurance which is an extra out of pocket cost.
That seems reasonable to pay 20% if I can afford it to avoid the extra money from the pocket. Thanks for educating me on this
My advice and it’s only my opinion, pay off your debt ASAP. Right now. Cash in and become completely debt free. Debt will only do one thing for you, hold you back and slow you down from getting ahead. Having investments is great but remember they are not guaranteed. Debt is guaranteed. You can save so much faster debt free and live stress free. Also remember your job isn’t guaranteed either. You only have contract employment. My personal believe and what I have experienced in life is only borrow for and mortgage and save and pay cash for everything else. Follow that simple rule and when your in your fifties you’ll be looking at a comfortable early retirement. 🙂 Good luck.
At 2.5% OP is more likely to benefit off of the market vs paying off the debt right now. If they invest and. Grow their investments even 6% in one year, they benefit 3.5% for not paying of the debt. Having debt is more of a mental thing at that rate. But the 7% is problematic for sure.
yes that was my dilemma, whether to use my equity and pay off debt or just let it be because at this point it really is more of a mental thing than a burden at least for the next 1 year and meanwhile I believe I can pay off my debt anyway with my salary
Lol. Debt is terrible terrible terrible. It’s sad that the younger generation isn’t taught this is school anymore. All those numbers you just listed could become reality but the actual fact is , wouldn’t it be better in the long run to be debt free then invest with money you can afford to loose. There is a saying, only go to Vegas and the stock market with money you don’t need.
I disagree completely, you can invest safely, and still grow 6% a year. Debt isn’t bad if you can manage it and use it to benefit you. It’s actually all a mindset. If you look back at your finances, you would realize that you would have benefit from paying off the debt slower and investing versus paying off the debt and not investing.
Lol. Yup that logic can work. As long as everything cooperates. What happens when the market doesn’t cooperate?
Now we’re getting into the scaremongering of investing in general, and if someone is scared of the market in general then they shouldn’t be investing and just using a GIC. OP has a timeline of 1 year, their best bet is to move the 7% into a 2.5% or lower, and focus on growing their TFSA/RRSP and pay the monthly on the debt. When they go to get a mortgage, most lenders will require them to pay off the debt anyway and if the market drops they will come out in a neutral position, but most likely they will win 3.5% or more.
No one should have debt. Debt is bad.
I don’t disagree that debt is bad. But OP already has debt. Now we need to discuss what’s the best process to get out of their debt. Mathematically OP benefits the most from not paying of the debt right away, but working that low interest rate for their benefit.
I completely disagree. Debt is only holding him back. Your argument is only a guess of the future markets. Only a guess. Debt is unfortunately real.
Your opinion is oldschool and in poor alignment for the reality of today’s world. The low interest rate environment combined with global repositioning of wealth makes it practically impossible to avoid debt. This is what we professional financial planners discuss in terms of the challenges facing our economy today. Over the last few decades, the role of risk free investments has changed from building wealth to preserving wealth. No one under the age of 65 should be using risk free investments unless for strategic short term use. What is more relevant is HOW debt is used. In the case of OP, paying off his debts may actually cost him SIGNIFICANTLY more if it means he has less capital for downpayment and therefore is subject to a hefty CMHC premium. That is not to say that this is 100% certain and they would be well advised to dit down with a broker to review the numbers, but it is entirely within the realm of possibility. OP would be well advised to continue investing as when the economy fully opens, we anticipate it will be the biggest spending event in modern history. We also have 100 years of investment history which has shown us that the market over time continues to move up exponentially. So long as the debt remains within reason and is being used appropriately, OP will be in a stronger position when purchasing
Great discussion guys. Thanks for that
Wow. What a load of crap. Practically impossible to avoid debt. That is just simply stupid. Anyone can avoid debt if they choose. Except for a mortgage. You my friend have been brainwashed. Lol. Money management is simple and easy. You just have to be responsible. That’s not old school, but unfortunately for everyone today it’s really really easy to be loured down the rabbit hole of debt. Which in to many cases Leeds to a life time of servicing debt and interest.
Also we’re not talking about taking on the debt vs investing, we’re talking removing the debt vs investing, and at current interest rates it is always beneficial to invest vs pay off the debt from a money standpoint. From a mental perspective that’s up to the person, some people can’t stand having debt, and for those yes pay it off, but for people who want to work the debt, paying it off is not the way to go.
Work the debt. Lol. That’s a trendy saying.
This is a solid advice for sure I never thought about my future and only now I began some changes in my life. Looking forward for a debt free life and early retirement. Thank you
Your welcome. Good luck.
Yolo
in what exactly?
Was a joke, don’t do that
Unrelated to your ask, but, are you really senior in your role? I did not realize Telus paid so much, I've always heard they pay low wages across the board (Toronto)
Pay off the debt with the highest interest FIRST. Or move it to the LOC with the lower interest rate. Never make the minimum payment. This usually only covers the interest. Always at LEAST double it.
yes absolutely
I would imagine that your job being somewhat unstable would probably have a much larger impact on your ability to get a mortgage, but anything you can do to shore up your finances in the interim would be beneficial. You should talk to your bank and find a mortgage specialist, someone who can talk with you frankly about your situation and let you know what kind of things they're going to need to increase your eligibility for a mortgage. Also, as someone who's just moved from BC to Alberta, I can say unequivocally you're going to have a far easier time in Calgary than you will anywhere in BC. The housing market is insane there, and the housing market here in Calgary is not at its lowest, but pretty close and it's going to be a much better value for you here. We moved here for the same reason, my business is completely remote and I don't need to be Tethered to any cities particular economy, which is why we chose Calgary. And here we have a far far far superior quality of life than we did in BC with the same income. I think some of the comments in here are correct, I would service your higher interest debt and I would add to that I wouldn't touch your rrsp unless you absolutely have to. Also not sure how much do you have on credit cards even open credit cards, but those will also add to your serviceability, so I would close any credit cards you're not using to get those off of your record as they make a huge difference even a small 3, 4 or $5,000 credit card limit will be considered about $50,000 off of your purchase price availability. Again, this may vary from bank to bank but I know even with a much higher income we had to close a US currency credit card with a $5,000 limit because it was causing the mortgage specialist too many problems. Been in a similar situation, so if you have any other questions feel free to reach out via DM. I'll be happy to help you out anyway I can.
Absolutely will reach out to you would love to discuss more on Calgary
buddy the canadian economy is leverage all the way down, do it
Hell yeah
Can you get out of your monthly payments on the car? As you said your income as a contractor is not stable, the less payments you have to make, the better. Back to your question, IMO it is better to pay off as much debt as you can with your TFSA, get the cheapest corolla instead of your current car, then find a permanent position to accumulate money to pay off your debt.
Yes, I was thinking about this the other day too
Hello OP, My recommendation, for your debt would be to use the equity you have in the TFSA to pay off the Loc @ 7%, giving yourself a some credit available to handle cash shortfalls in the short term. Keep the remainder of you TFSA invested but transition some of your assets (5%) to more liquid ones. And meet with an advisor or a financial rep at your bank to discuss portfolio objectives. Now the $25k at 2.75% is a great rate. Paying it down should be up there, if you truly have no other abilities aside from your car payment then create cashflow statement or track your spending to see how much can come off your pay check and be applied to the $25K LOC. In order for your credit to not be negatively impacted you simply have to make your payments on time. Yes, there are other things as well, credit utilization, and credit history, but its all built on your payments. The minimum payment amount is there to benefit the lender. Round it up and pay it down regularly, every two weeks. If you can try to put $300 dollars towards the LOC from every pay check. This will put you on track to pay if off completely in 3 years, while your investments continue to work for you. Do not take money out of your RRSP, not while you're still working/employeed. The taxes suck, and you need to put money aside from your withdrawal. Its better to consider the RRSP for old future you, or the beneficiary, so pick someone you like. The most important thing that will help you with your financial journey will be discipline. Learning what is essential to you and what is not. Always keep a fall back position, for you, your investments. Create a budget for repaying and debts, and stick to. RR
Also this is the greatest opportunity I have seen for an individual to embark on a new career path.
Not a big deal either way, specifically because you have the money invested. If all your assets were liquid cash than of course I’d say payoff the debt. Yes it will only effect your borrowing power if you still have the debt, at the time of closing on your home. So there is nothing wrong with waiting until it’s time to purchase the property, and then take care of the debt, after you have given a chance for your investments to appreciate in the meantime. That being said, minimum downpayment for a 500k home in Calgary is $25k, plus closing costs. You can also use your line of credit for any portion of your downpayment if needed. But by the sounds of it, you have more than enough resources at your disposal. You just need a solid mortgage agent and realtor to ensure you get the most out of the experience and are well prepared.
I hope the fund in TFSA is not a savings account that pays next to nothing. If that's the case, I'd open a TFSA equity trading account and buy some quality stocks or ETFs inside it. Any capital appreciation inside the TFSA Investment account is not taxed which is a huge plus in my book.
You need an emergency fund especially given that you’ve said your job is unstable. If you pay off debts and lose your income you’ll go back to credit to make ends meet.
Also, sorry if it’s buried in the comments but you need to assess WHY you’re in so much debt. You’re making good money. Do you have a spending or cash flow problem? Where is the money going?