Is Home Ownership Right For Me?

Are you a first time home buyer looking to break into the real estate market? In Canada, we’re often told that a real estate investment is one of the best investments you can make. But is home ownership really right for you? Here are some important factors you need to consider when preparing to buy your first home.

Home Ownership Is Expensive

Is Home Ownership Right For Me

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In August, RBC released its Housing Affordability Index which showed that in the second quarter of 2013, Canadians are spending more of their pre-tax income to maintain their homes. The costs they measure include mortgage payments, utilities and taxes. According to Rob Carrick at the Globe and Mail, housing prices have appreciated by roughly 6% every year for the last 15 years. That is three times the rate of inflation.

Though the index wasn’t through the roof, it is still a sign that as increases in wages slow and the cost of housing increases, it’ll become more costly to maintain a home.

Mortgage Rates are Set to Rise

As we discussed in our article about how rising interest rates affect home buyers, increasing mortgage rates will likely have a negative impact on home affordability.

As a result, lots of first-timers are rushing to get pre-approved for a mortgage rate now, while rates are low, and buy a home before the pre-approval rate expires.

However, Randall Weese, Licensed Broker of Record at ComFree Commonsense Network brokerage in Ontario, warns that locking in that pre-approval doesn’t guarantee anything.

“Banks will pre-approve buyers based on their pre-tax income,” says Randall. “This can lead to buyers being approved for much higher loans than are economically healthy.”

“Also, that pre-approval rate is not a guarantee that you’ll get financing for the specific house you choose. Buyers still need to get final approval from the bank,” he warns.

Don’t Worry: Home Ownership is Still Possible!

While the above makes the outlook seem bleak for first-time home buyers, homeownership is still a dream that many Canadians have. For that reason, it is something to strive for. So here are a few suggestions from our experts:

1. Consider ALL the costs.

Don’t just think of your monthly mortgage payments when calculating the cost of housing. Look at the property taxes, insurance costs, maintenance costs and the closing costs on the home. By looking at the totality of potential expenses, you’ll get a more realistic idea of how much of your salary will go towards the house.

2. Budget for the largest down payment possible.

Minimize your debt from the get-go by making the biggest down payment you can afford. This will lower your monthly mortgage payments and greatly reduce your stress when it comes to making payments.

3. Shop realistically.

Home décor TV shows and other images in the media often give us unrealistic expectations when it comes to real estate investments.

As a first-time home buyer, you probably can’t afford the home with granite countertops and three full bathrooms. Shop within your budget, keeping in mind your medium-term housing needs.


With careful planning and budgeting, first-time home buyers can realize their dream of homeownership. “The key is to be realistic about what you want versus what you can afford,” concludes Randall. allows buyers to search for homes within their budget range. Visit to set up email alerts to be notified when properties for sale that fit your criteria come on the market.

1 comment

  1. says:

    I guess timing is everything and owning a home is a huge decision. There comes a point when you have to invest into yourself and go for it. If you think about it, your going to be paying rent or a mortgage anyways right? why not invest in yourself and maybe think about buying a home with a rentable basement suit. Become a home owner and a land lord in one shot.

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