According to a recent survey by TD Canada Trust, Gen X Canadians want to consider themselves “House Plus”, meaning having plenty of room for extra spending after their mortgage payments are made, while only 14 per cent of Gen X Canadians would rather stick to a home at the high end of their budget, even if it means larger monthly mortgage payments.
“More than two thirds of Gen X Canadians have told us they don’t want their entire budget allocated to mortgage payments,” said the Associate Vice President of Retail Products at TD, Nupi Zubair. “It’s possible to own a home and not feel handcuffed to the mortgage, but it does require careful saving and planning before signing on the dotted line. Buyers need to purchase a home at a price they can afford, while still budgeting for the other things on their list of priorities.”
TD says that younger homebuyers should:
- Save for a down payment
- Set a budget
- Buy the house that fits the budget
- Ask for advice from a mortgage specialist and financial advisor.
“One way to have more disposable income every month is to make a larger down payment up front, which ultimately reduces the size of the mortgage and monthly payments,” said Zubair. “Keep in mind though, a shorter amortization period and making payments weekly, rather than monthly, can increase overall payments but lower the overall costs of the mortgage. It really comes down to the buyer’s priorities.”