Forget wedding bells, young Canadians are more interested in being a homeowner.
Some 40% of under-30s say buying a property is critical to their five-year plan, signalling a preference over travel (30%) and marriage (24%).
The survey conducted by the Royal Bank of Canada comes as interest rates have dropped a further 0.5% to 3.75%, reducing the prime rate to 5.95%.
With real estate values yet to react to cheaper loans, affordability is rapidly improving.
The National Bank of Canada confirmed recently that borrowing costs are falling faster than prices are rising.
The RBC survey finds 78% of those under 30 who are either single or unmarried have now set saving for a home as their No.1 priority.
First homebuyers’ mood seems to be changing quickly now rates have started to fall.
An Ipsos in June found only 45% felt they’d be able to afford a home. A disenchanted 78% believed owning a home was reserved for the rich.
If you’re feeling more optimistic about climbing onto the property ladder, here are a few tips to help you on your way:
Not a Sprint: Even with mortgage costs falling, buying your first home is a significant step. It was never easy for previous generations. The experience can feel like a marathon, but it’s something most of us go through.
Mortgage Insurance: Be aware that if you have less than a 20% deposit, you’ll need mortgage insurance. This is a policy that you must buy to protect your lender from any risk that you might default. The expense reduces the likely size of your loan.
Savings Goal: Research prices in your target areas and get a sense of the size of loan you’ll need. Don’t forget to factor in costs such as legal fees, building inspections and moving expenses.
Make a Budget: Track your income and expenses, and reduce non-essential spending. Automate Savings: An automatic transfer into a specific savings account will reduce the pain of saving.
Family Help: A Canadian Imperial Bank of Commerce (CIBC) survey says almost a third of first-time buyers receive help from their families. That assistance averages $115,000. Is this possible for you?
Assistance Schemes: Check-out if you qualify for assistance schemes established for first homebuyers. Also, be aware the government has just extended the limit of insured mortgages from 25 to 30 years, thus lowering the barrier to entry.
Side-Hustle: It’s not unusual for first-time buyers to find a second job or side-hustle to accelerate their savings plan, and also reduce the pain of regular mortgage payments once they’ve bought.