Finding housing can be a big job, especially for newcomers to Canada. From budgeting for housing, researching neighbourhoods and deciding if it’s better for you to rent or buy a home, there’s a lot to consider when deciding where to live.
Research from RBC shows that aspirations of home ownership are considerably higher for newcomers to Canada than the average person. Here are tips to help you prepare to buy your first house.
Understand how much you can spend
Having a realistic idea of how much money you can afford to pay for housing is important. This will help you narrow your search and prevent you from overspending.
Make a budget by comparing your income to your monthly expenses. In addition to housing, groceries and transportation, account for the cost of utilities like internet and cellphone, and a little extra for entertainment or a meal out once in a while.
It’s a good idea to research the area you want to live in to make sure it has access to the amenities and services you need, like schools, community centres and public transportation. You can learn a lot about a certain place by talking to people who live there or joining residents’ groups on social media. It’s also a good idea to take advantage of online tools that can help you determine the average costs to buy or rent based on neighbourhood and the size of the home.
To rent or buy?
If you have the means, you might consider purchasing a home rather than renting. Each has benefits, but your decision might depend on your current situation and financial goals.
Buying: If you have an established credit history and have saved a down payment, you might consider buying a home, which will help you build equity to tap into in the future (the value of the mortgage you’ve paid back each month). However, you may give up some flexibility. Unlike a rental, you can’t simply give notice to a landlord if you want to move. Plus, it can be harder to budget because maintenance costs and mortgage interest rates fluctuate.
Renting: Not owning may be less expensive and come with fewer responsibilities. With fixed monthly costs, you can free up more money to do other things like save or invest. However, you aren’t building equity when you rent. Living in a rental also means you don’t have as much privacy or the freedom to renovate.
Whether you rent or buy is a big decision, but there are tools to help. A rent or buy calculator lets you input your rent and see how much of a mortgage you can afford for the same monthly amount. Some also show how much you could pay for a home.
Find more information at rbc.ca/newcomers