Can You Afford a Cottage?

A cottage by the lake is an excellent getaway for many Canadians. After the hustle and bustle of work and fast moving city life, it is quite appealing to end up relaxing by the water to recharge your batteries. While many Canadians might want to purchase a cottage, it needs due consideration. Here are some things to think through to actualize that idyllic dream.

Assess Your Financial Health

It can be quite easy for the idea of a warm day by the lakefront to lure you into making a purchase decision that isn’t prudent. The first place to begin when thinking about getting a cottage is to look at your financial health.

Consider the ‘32% rule’ to determine if you can manage to acquire a cottage. The idea here is that if the total cost of your mortgage (for the cottage as well as for your primary residence if you have one it as well), interest, and maintenance costs of all the property under mortgage and fees should not amount to more than 32% of your annual income. If you find that this is the case for you, it implies that it financially viable for you to buy a cottage.

What Will It Take to Own it?

A typical cottage in Ontario (by the waterfront and accessed via land) will typically set you back $200,000-$400,000. If you’re looking at Kawartha & Muskoka, it will cost you even more. Beyond that, you need to consider the other costs which include:

  •    Cottage association fees
  •    Maintenance charges
  •    Property taxes
  •    Renovation costs
  •    Other utilities
  •    Cottage mortgage payment

When you add these up, you get the total cost for owning the cottage. Compare this amount to what you think you can afford (once you assess your financial health) to determine if you can cover it. Do not forget to factor in cottage insurance as it will help maintain the place in case it falls into disrepair.

Consider Your Other Options

Even though your persistent vision might be to own the cottage outright, there are other options you can consider if that becomes financially challenging.

You can opt to rent the cottage during summer time for a week of your choosing then rent it again over four weekends in spring and summer. You’ll be able to experience all the amenities a cottage affords without the attendant commitment of owning it.

Fractional ownership is another option that makes cottage ownership more affordable. You can buy a portion of the time you will spend at the cottage and spread it over the year. For example, you can buy ten weeks and use it up over the year. You get to enjoy the cottage without the hassle that comes with owning it.

You can consider sharing the purchase cost with friends, colleagues or family and plan out the schedule.


Owning a cottage to hide away in and relax is an aspiration for many Canadians. To make this dream a reality, understand the cost implications of ownership and weight them against your financial ability to know how to best go about it.