Here's how much you need to earn to afford a home in Ottawa

House for sale in Ottawa on Feb. 24, 2011. (THE CANADIAN PRESS IMAGES / Sean Kilpatrick)

The income required to purchase a home in Ottawa has dropped $7,500 over the summer, but you will still need to have a six-figure income to buy your dream home.

A new report from RateHub.ca shows that homebuyers will need to earn at least $129,980 to meet the requirements to obtain a mortgage for the average priced home in the capital, with a 20 per cent down payment.

That's down from $137,050 required to purchase an average-priced home in Ottawa in June.

The report looks at the income required to purchase a home in Ottawa, with the average home price of $650,200 in August. The stress test rate was 7.3 per cent and the mortgage rate is 5.3 per cent.

Ottawa had the fifth-highest income requirement to purchase a home in August, of the 10 Canadian cities looked at by RateHub.ca. Vancouver had the highest income requirement of $223,850, followed by Toronto ($213,950), Victoria ($183,700) and Hamilton ($167.500).

RateHub.ca says all 10 Canadian cities studied saw a drop in the income required to purchase an average price home in August.

"Homes in every city we looked at are slightly easier to afford than they were two months ago. This is because rates have remained unchanged, while home prices have softened," says James Laird, Co-CEO of Ratehub.ca and President of Canwise mortgage lender.

According to RateHub.ca, the income required to buy an average-priced home in Ottawa in March was $121,700, before increasing to $137,050 in June.  The mortgage rate and the stress test rate were lower in March (3.14 per cent mortgage rate, 5.25 per cent stress test rate) than in June and August.

Laird says if the Bank of Canada increases interest rates again and there is a stabilization of home prices, affordability will start to decrease again.

"If rate hikes were to come to an end soon and home prices continue to drop, affordability would keep improving."