The Fall Home Buying Report from BMO Bank of Montreal has revealed that over 40 per cent of people who are actively looking to buy a home are expecting to pay 21 per cent more ($83,556) than they were at the beginning of their house hunting journeys.
According to Martin Nel, the Vice President of Personal Banking Products for BMO Bank of Montreal, said, “Housing prices in Canada have risen 18 per cent over the past four years. As prices rise, house-hunters need to ensure their savings are keeping pace, especially first time buyers who don’t have the leverage of a current house in the market.”
Despite this change in planned spending, 56 per cent of those polled were able to save more for a down payment, while 81 per cent say they have a better understanding now of current market prices.
Sal Guatieri, the Senior Economist for BMO Capital Markets, said, “By shifting towards semis and townhomes and away from detached and condos, buyers appear to want their cake and eat it too – a backyard for the kids to play in, but also something that won’t break the budget, notably in Vancouver and Toronto.”
Nel continued, “When assessing whether or not a new home is financially realistic, it’s important to consider that housing costs – including mortgage payments, utilities and taxes – should not take up more than one third of your total household income. Choosing a 5 year fixed low-rate mortgage with a maximum 25 year amortization rate helps home owners to pay their mortgage off faster and save in interest over the long term.”