Millennials most optimistic about buying a home

 Aleesha Baronian and Matthew Laturski are looking forward to moving into their first house with their chihuahua. SUPPLIED

After renting an apartment for nearly a year, Matthew Laturski and girlfriend Aleesha Baronian purchased a semi-detached home in Oshawa and are excited to begin investing in their financial future when they get the keys next month.“I think the best side hustle you can do is own a house. It just doesn’t make sense to pay rent when you can put that money towards something that will be an asset for you,” says Laturski, an accidents benefits adjustor.They began their journey to homeownership began when Baronian’s dad offered to help with a down payment. “We thought about saving up a bit more money but my dad reminded us that we could wait another six months and save another $5,000 but the same house we’d buy today would be more expensive down the road,” says Baronian, a customer service representative.Like many young couples, saving for a home when launching their careers and paying off student loans felt like an “uphill battle” but near record low mortgage rates sealed their decision to buy.
Realtor Monique Johnson says her Keller Williams Portfolio Realty Brokerage has seen a record number of transactions by millennials this year. They have a “hunger for financial independence” and see real estate as a “safe investment” that’s a “strong vehicle” to create the life they want.“Perhaps seeing their parents and peers be successful in real estate is giving them that push…Other incentives are making this the perfect storm for young people to jump into the market,” Johnson says.Those incentives include the federal government’s National Housing Strategy and RRSP Home Buyers’ Plan and the provincial government’s Land Transfer Tax Rebate.She’s impressed with today’s savvy young buyers and the steps they’re willing to take to get into the market. “There was a time when I would get calls from young people wanting to buy the heart of the city. That’s no longer the case,” Johnson says.“They’re willing to go to the suburbs. They’re buying a property and renting part of it out. They understand how real estate can be used as a tool to create wealth for themselves and is more than just about a place to live.”If they don’t have enough money for a down payment, some are even reaching out to someone in the same situation and together coming up with a full down payment and either living in the property together or renting it out. “Young people are rarely buying move-in ready homes. They’re buying homes they can afford,” she says.

A recent Scotiabank survey revealed just 38 per cent of Canadians believe now is a good time to buy a new home. However, younger Canadians appear to be more optimistic about purchasing a property during the COVID-19 pandemic.Nearly one in five of Canadians aged 18 to 34 years say the pandemic has accelerated their plans to purchase a home or investment property; though one-third are waiting for prices to drop before buying a home.
Before you begin house hunting, understand what you can afford within your budget.“There are a lot of different options for qualifying for a mortgage and a lot of different down payment options,” says Scotiabank home financing advisor Mary Adamidis. An online mortgage calculator, such as Scotiabank’s What Can I Afford? Tool, will give you a good sense of the mortgage you could qualify for.“Once you’ve set your savings plan and determined how much home you can afford, getting a pre-approved mortgage is the next step,” Adamidis says. “With a pre-approved mortgage, sellers know that you’re creditworthy and you have the ability to make an offer quickly.”Tips for millennialsThe following tips from Scotiabank home financing advisor Mary Adamidis can help make dreams of homeownership happen:
Manage debt.

Lenders typically calculate your ability to afford a mortgage based on traditional debt-to-income principles, which consider your monthly housing costs, gross monthly income and existing debt, and also includes loans, credit cards, lease payments and any other outstanding debt.

When preparing to begin your homebuying journey, evaluate your existing debt and see what you can pay off to help ensure your credit rating is in good standing. If you can’t eliminate your debt entirely, make sure you’re on a regular payment plan and are keeping your credit in good standing.Save, save, save. The greater the down payment, the less you’ll have to borrow and if you have at least 20 per cent, you won’t have to pay mortgage default insurance premiums. Set a savings goal based on your estimated budget for your home. If you’re looking to purchase a $600,000 home, for example, try to save at least $35,000. (Insured mortgages require five per cent minimum on the first $500,000 of the purchase price and 10 per cent on any amount over $500,000 up to $999,999.)A pre-authorized debit plan into a savings account, such as a Tax-Free Savings Account, can help you reach your goal, while a regular savings routine can help you prepare for unexpected expenses, such as legal fees and moving expenses.

How to save for a down payment on a house, fast!

If you’ve been struggling to save money to put towards a down payment on a house, you’re not alone. With mortgage rates and the prices of homes skyrocketing all across the country, it’s not uncommon for first-time home buyers to borrow or be gifted a down payment from other sources, particularly their parents. Although there are other means of borrowing a down payment, such as a line of credit, a personal loan, or tapping into your savings, there’s no doubt that saving thousands of dollars yourself is both rewarding and tough.

The trouble is …

Where do you even start?

Here are some tips that can help you save for a down payment so you can buy a home and finally dip your toes in the waters of real estate.

Top six ways to start saving for a down payment so you can buy a house

It’s time to start saving and here’s what you can do to make your down payment and closing costs saving process even easier:

1. Open a savings account

Having a savings account can be one of the best ways to put money aside and not end up touching it so it continues to increase, and even build a little bit of interest. It’s also really convenient and requires no extra work on your end. All you need to do is tell your financial institution that you want to open a traditional savings account and set up auto-deposit so that every time you get paid, for example, a set amount will automatically be transferred into the savings account.

You can also start a Registered Retirement Savings Account (RRSP) and use up to $35,000 of your savings ($70,000 as a couple) to buy your first home along with the federal government’s Home Buyers’ Plan. However, you must repay that amount back to your retirement savings within the next 15 years.

2. When do you want to buy a house?

Coming up with a timeframe on when you actually want to start the home buying process can help you stay on track and help you make sure you’re setting aside the proper amount of money every month, especially if you have a general idea of where you’re hoping to buy a house. Knowing the when and where aspects will definitely aid in the process of figuring out how much you’ll (approximately) need to save.

3. Prioritize your goals

If owning a home is your ultimate goal, you may need to put other things on the back burner for now such as buying a new car, going on vacation (sorry!), limiting how often you go out to eat, or resisting purchasing that nice watch on display. It may not seem like a big deal at the time, but every little bit you put towards a down payment can really come in handy in the end, even if it is only $50.

4. Pay off your debts

This obviously sounds a lot easier said than done, but trying to pay off other debts (like your credit card) first can actually help improve your chances of getting improved for the mortgage amount you want. The debt-to-income ratio is one of the most important factors when it comes to determining how much mortgage you’ll be able to borrow, particularly when it comes to your credit score. How long you’ve been building credit, how often you make payments on your credit card, any outstanding line of credits, and if your payments are made on time will all be taken into consideration. A credit score of 660 and up is considered good. A bad credit score is 579 and below. The lower your credit score is, the more you’ll be deemed a “risky” lender.

5. Put yourself on a strict budget

Buying a home comes with sacrifices. Remember, you want your saving account to increase, not decrease! This means you may have to get used to living on a stricter budget. Ways to do this can include:

  • Think before you buy. Get into the mindset of: is it a want, or a need?
  • Skip vacations for a bit, try to find the best deals available, or vacation locally
  • Try not to eat out a lot and if you do, use coupons Go to the library instead of buying books
  • Buy used clothes or stick to your current wardrobe
  • When grocery shopping, make a list and stick to it (and use as many coupons as you can)
  • Research prices before you go somewhere and see if they offer price matches

6. Work on the side, if you can

Working full-time is already tough enough, but some people may find it beneficial to get a temporary part-time job on the side as well to make saving a little easier. Or, if you have a hobby like painting, pottery, or making jewellery, consider selling your products online. Remember, any contribution can make a huge difference, even if it seems small at first. Plus, you can take advantage of an extra job to help pay off your debts quicker.

How else to come up with a down payment so you can get into your first home

If saving every month has proven to be difficult (which it is for many of us, especially while renting or paying for a car), there are other means by which you can borrow a down payment, or utilize government programs.

Home Buyers’ Plan

As mentioned above, you can tap into your RRSP account to withdraw up to $35,000 tax-free (or $70,000 as a couple). This does, however, require repayments for the next 15 years.

First-Time Home Buyer Incentive

The First-Time Home Buyer incentive is shared equity with the Government of Canada. If you qualify, the incentive aims to help reduce monthly mortgage payments by five to 10 per cent on a newly constructed home, five per cent on a resale home, and five per cent on new or resale mobile or manufactured homes. This allows first-timers to potentially save less for a down payment since their monthly mortgage payments will be less as well. The buyers must repay the incentive in 25 years or when the home is sold, but they can also choose to pay the incentive back in full when they require the funds without penalty.

First-Time Home Buyers’ Tax Credit

While this isn’t necessarily a way to save for a down payment, it is a way to get money back from the government for future mortgage payments or just help you financially in general. Those who are just purchasing a home for the first time (or who haven’t owned a home in the last four years) will qualify and can receive a total tax rebate of $750. This may not sound like a lot, but when you’re purchasing a new home, any amount of money helps.

GST/HST New Housing Rebate

This is another rebate program that you can obtain the GST/HST portion of what you paid on an owner-built home, purchased a new residential rental property, or have undergone a substantial renovation/home addition. You can receive a maximum amount of $30,000 if you qualify.

How much you may need to save before buying a house, including closing costs

Even if it takes you a few years to save the amount needed to buy a house, starting to save early can make all the difference in the world. In Canada, the typical amount you need to save for a down payment is five per cent on the first $500,000, and 10 per cent on the remaining amount, so, for example, if a house is listed at $600,000, you’ll need $35,000 as a down payment. This amount doesn’t include closing costs though, which can run anywhere from another two to four per cent of the purchase price. In that case, if a home is $600,000, closing costs could range from $12,000-$24,000.

A common mistake first-time buyers make before buying a home is just saving enough for a down payment, therefore, you’ll also want to consider saving for the following* before looking for a new home:

* These are rough cost estimates and are subject to change.

Property Appraisal ($300+)

A real estate appraisal, or land valuation, is when an expert determines the value of a home before it’s listed on the market. A value is determined based on what other properties are selling for in the area, current market trends, and the aspects of the home (square footage, upgrades, etc.). This can help sellers determine if they’re happy with the value or if they need to improve on finishing touches before listing to get the most ROI.

Home Inspection ($300+)

A home inspector provides a close search of the home, not the whole property like an appraiser. They’ll ensure that things are up to code and safe such as the framework, electrical work, plumbing work, the roof, the exterior, and more.

Title Insurance ($400+)

Title insurance is necessary as it protects you if there are any issues with signing over ownership to the house, and losses due to title fraud/defects. Title insurance isn’t actually mandatory, however, it’s definitely recommended to protect you against any potential risks, for example, if the seller puts the house for sale without their ex-partner knowing and that partner tries to dispute the sale, leaving you without a home.

Mortgage Insurance

Mortgage insurance doesn’t necessarily benefit homeowners in big ways unless they’re seen as a risky lender. These rates will vary and will be calculated at a certain percent of the purchase cost. It’s mainly to assist the financial lender in case you default on a mortgage payment. The cost will be added to your monthly mortgage payments.

Land Transfer Taxes

Whether you buy a condo or a house, every property is subject to land transfer taxes in Ontario. The cost will vary per transaction depending on the province and will be paid when the deed to the house is transferred in your name. The cost will be calculated after taking into consideration the province, the purchase price, the cost of upgrades, and more.

Legal Costs ($500+)

You’ll need to pay your lawyer for conducting a title search, prepare and review the deed and any other paperwork, transferring documents, etc. It’s not legally required, but it does make the process much easier, especially for those who have never gone through the buying or selling process before.

Moving Expenses ($750+)

Don’t forget you’ll likely have to pay for a moving truck! They typically charge per hour and also take into consideration the distance between your current living situation and your newly purchased home. If you know a few people with trucks that are willing to help, great! Otherwise, you’ll want to invest in a professional moving company.

Property Taxes ($1,000+)

Just like when you rent and provide the landlord with last month’s rent, you’ll have to reimburse the seller’s property taxes, utility charges and other expenses. Your lawyer will be able to determine how much you’ll owe, which will be paid on the closing day. Remember, this is only if the seller has pre-paid for the entire year, otherwise, they will have to make a payment to the municipality.

Struggling to save for a down payment?

If you’re struggling to pay for a down payment, you’re not alone. It’s not uncommon for people just getting into the real estate world to borrow a down payment from a family member or a different financial lender than their mortgage is from. Saving for a down payment can definitely take longer than you’d hope, but there are still ways you can reach your goal of doing it yourself!

The best way to save for a down payment is to free yourself of debt and other expenses, particularly a car or a credit card. You should also consider making a plan/a goal; when do you actually see yourself moving into a home? One year from now? Two years from now? Once you have a goal in mind, this can help you determine a proper savings plan. You’ll also find it beneficial to set up a savings account with automated payments, so every time you get paid, money will automatically be transferred into your savings. You could save even more money if you stuck to a strict budget; no more going out for dinner or splurging on newly released books or movies!

Lastly, remember that when it comes to your savings for a house, a down payment isn’t the only expense. Expenses associated with closing on a house can be quite extensive, especially when it comes to appraisals, land transfer taxes, property taxes, moving costs, and lawyer fees. While you shouldn’t let this damper your plan to get into real estate, you should definitely take the time to map out realistic goals according to your specific financial situation. Take it step-by-step. This isn’t something that everyone can rush into, and that’s okay.

Millions of Canadians already missing payments due to COVID-19

We are still relatively early in the coronavirus crisis but already many people are missin payments.

A new report from insolvency practitioners Bromwich+Smith with Leger Research has found that 49% of households in Ontario and Alberta, and more than half in British Columbians, have suffered an immediate income reduction since the crisis began.

The share of households who reported already falling behind with payments on credit cards, utilities, or telecoms is 24% in Alberta, and 19% in Ontario and BC.

“The results are quite staggering really. Of course, we get a sense of what is happening when we read the news, but the survey results make it far more real having interviewed 750 people across BC, Alberta and Ontario,” says David de Lange, Senior Vice President of Leger Research.

Getting help
Most of those struggling will reach out for help from the federal and provincial governments but almost a quarter of respondents said they didn’t know how they would adjust to a reduction in income.

Bromwich+Smith advises that getting government help is a good first step for those that cannot pay their debts followed by asking their mortgage lender to see if a deferral could work for them or call a licensed insolvency trustee to understand if restructuring debts makes sense for their current state.

COVID-19: Government announces new mortgage buying program









The Canadian government has announced a further measure to mitigate the impact of the COVID-19 crisis and to help maintain stability in the financial system.

It will launch a revised Insured Mortgage Purchase Program (IMPP) which will see up to $50 billion of insured mortgage pools purchased through the Canada Mortgage and Housing Corporation (CMHC).

It means that banks and mortgage lenders will have stable funding to continue to lend to consumers and businesses.

The government highlights that this does not pose additional risk to taxpayers as the insured mortgages being purchased are already backed by the government.

“These events remind us all how crucial it is to have a safe and affordable place to live. CMHC exists in part to buffer the effects of events such as the COVID-19 virus pandemic, which affect the health and stability of Canada’s financial system. This is what we do. We are part of a federal team that is working hard together to ease the impacts on Canadians,” said Evan Siddall, president and CEO of CMHC.

Earlier this week, the Office of the Superintendent of Financial Institutions (OSFI) announced measures to shore up finances of the institutions it regulates and the suspension of the planned changes to the mortgage stress test.’



We’re taking measures to help the during . Through an Insured Mortgage Purchase Program, the will buy up to $50B of insured mortgage pools to help lenders. Details: 

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Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Market update:

Big Six banks to allow 6-month mortgage payment deferral









Canada’s largest banks are coordinating their approach to the COVID-19 coronavirus outbreak to protect their employees and customers.

Measures to support both health and finances will have some common elements across the ‘Big Six’ banks – RBC, CIBC, TD, Scotiabank, BMO, and National Bank of Canada, the Canadian Bankers Association said.

Financial support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.

Individual Canadians or business owners facing hardship are encouraged to contact their bank directly to discuss options that could be available to them.

In keeping with advice from Canada’s public health authorities, the response is also designed to support social distancing to control the virus’ spread.

That means that branches will be closed or operate with reduced hours, while special care will be taken with those branches in rural communities.

Critical services will be maintained and many banking services will continue to be available through ABMs, mobile apps, bank websites and telephone banking.

Banks will be communicating with customers to explain the measures they are taking.

Canada’s banks are being supported by a reduction in the stability buffer required for a ‘rainy day’ and by other measures taken by the federal government and Bank of Canada in expectation of a potentially-prolonged downturn.

With interest rates currently at 0.75%, there is room for the BoC to make further reductions in line with some other major economies. The Fed cut its overnight rate to a range of 0% to 0.25% on March 15.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Market update:

Home sales poised to moderate









The COVID-19 outbreak will likely moderate house sales in the near term, according to an economist.

Brian DePratto, senior economist at TD Bank, said the current market conditions due to the impact of the coronavirus paint a bleak picture for home sales in the next months.

“That said, sales are well-positioned to make a strong recovery once the impact of the virus dissipates, helped by an ultra-low interest rate environment,” he said in a report in The Canadian Press.

DePratto said the recovery in sales once the concerns surrounding the COVID-19 ease will likely translate to price gains.

Home sales increased by 26.9% annually in February. On a monthly basis, sales were up by 5.9%, driven by the strong turnout in the Greater Toronto Area (GTA). This came with a 7.3% growth in new listings.

The healthy sales activity and the gains in listings came with a 15.2% annual growth in the national average price for homes, which now stands at $540,000. Excluding the major markets of Greater Vancouver and GTA, the national average price during the month grew by 10.5% to $410,000.