The average first-time homebuyer in Canada is 29 years old and expects to be able to put down a down payment of $48,000 on $300,000 home, according to a recent poll by the Bank of Montreal.
But the study, released Tuesday, also found that price expectations vary widely, depending on where the homebuyer lives in. Those in Atlantic Canada say they expect to spend an average of $224,000 on a first home, while those in British Columbia anticipate to pay an average of $454,000.
Vancouver topped the survey as the most expensive city, with buyers there saying they’re going to shell out an average of $539,000 for a home, followed by Calgary at $474,000 and Toronto at $446,000.
BMO mortgage expert Laura Parsons says like with any major purchase, it’s important for people be realistic and prepared. “What we tend to do is jump in the market when we’re ready, instead of starting a plan now,” she said from Calgary. “Let’s start getting ready for it so we can start giving you good advice all along the way. Don’t be afraid to get things going.”
And while a large down payment is impressive, it does not necessarily mean that young people are diligently saving for their first home. Instead, many may be getting help from their Baby Boomer parents or friends, said Parsons.
Forty-six per cent of those surveyed also they’ll choose a fixed mortgage rate when they buy, versus 20% who will choose a variable rate. The study also found that the average first-time homebuyer plans on paying off the mortgage on their home within two decades, with 20% anticipating they’ll be mortgage-free even earlier than that.
Twenty-three per cent of those surveyed say they will still have a mortgage within 25 years; 16% say within 20 to 24 years and 20% say within 10 to 19 years.
On the opposite end of the spectrum, seven per cent say it’ll take them more than 25 years to fully own their home, while 3% say it’ll take them between 1 year to 9 years to pay it off.
The survey also found that 31% admit they really don’t know when they’ll be able to stop making mortgage payments.
Source: Linda Nguyen, Canadian Press