The cost of buying a home has gone up, but how much does it cost to own one?
And what does the mortgage calculator offer you?
Read moreArticleBy the end of 2020, an average home will have cost about $300,000, according to a new report from real estate agency RP Data.
That’s up almost 10 per cent from last year.
But that doesn’t mean you have to start paying off your mortgage any time soon.
You can also find out what you can save by buying a second home, a second loan and a second property in 2019.
It’s a combination of things.
If you have a new job, it could save you thousands.
If you’re still living at home and need a place to stay, it may help.
If your home is in the suburbs, a third home may be worth it, especially if it’s in a good neighbourhood.
And a fourth home can be a great way to put your skills to use and save for a down payment on a new house.
For those who are starting to make money, you can even save money on your mortgage by renting out your home to others.
You might be able to save on your down payment if you’re paying off a mortgage at an annual rate of 2.25 per cent.
But a lower rate is better than nothing, especially for a first-time buyer, said Craig Thompson, senior vice-president of RP Data’s mortgage division.
“It gives you an opportunity to get an equity, so you can make a long-term plan for your money,” Thompson said.
The number of mortgages for first-timers in Canada has risen by more than 30 per cent since the housing bubble burst in 2007, according, according RP Data, to a report published last year, which found that mortgage originations in the first quarter of 2019 were up by 15.3 per cent compared with the same quarter a year earlier.
Rates of first-mortgage interest have also been increasing in the last year with interest rates in the Canadian market increasing from 2.75 per cent in the third quarter of 2018 to 3.25 in the second quarter of 2020.
In fact, the average interest rate on a home loan has risen to 2.66 per cent as of the end, according the RP Data report.
But the interest rate you’ll pay on a mortgage will also depend on where you live, and the length of your stay there.
In Vancouver, for example, the median price of a new home for first time buyers was $500,000 in 2019, but by 2020 it had climbed to $2.4 million.
The median price for a second-home purchase was $2 million in 2019 but by the end it was up to $3 million.
The average rate of interest for a new mortgage was 3.5 per cent, compared to 3 per cent for a mortgage on a second house, and 2.4 per cent on a first home.
That’s why, in 2019 it took the average first-year buyer just over a year to pay off the first mortgage, and by 2020 the average second-year homeowner had paid off the second mortgage, said RP Data data’s chief economist, Matthew LeBlanc.
But if you have less than $40,000 to spend and you live in a market with a higher rate of home price inflation, a higher loan could be a better investment, said LeBlan.
“There are definitely times where it’s worth it to have a higher equity,” he said.
“If you are buying a $200,000 home, the value is much higher, and you can have an equity in it.”
Read moreAbout the Author:Alyssa Molnar is a reporter with the Calgary Herald.
She can be reached at [email protected]