More than two-thirds of Generation X Canadians (aged 35-45) consider themselves "House-Plus" buyers – those who want enough funds left over to afford their lifestyle and travel after paying their monthly mortgage, according to the results of a TD Canada survey released September 9.
According to the survey, only 14 per cent of Generation X Canadians consider themselves "House-All" buyers who go to the higher end of what they can comfortably afford when it comes to their mortgage, leaving less room for discretionary spending.
But the survey found the group to be fairly evenly split between those who see themselves living in their current home forever (42 per cent) and those who see it as a stepping stone to a different property (45 per cent).
The survey also found that sale price is the most important factor for Gen X Canadians buying a home, followed by location and the future appreciation of house price. This was especially true of those who consider themselves "House-Plus" homebuyers, but even "House-All" buyers put sale price at the top of their list.
Access to public transit and proximity to schools were much lower on the priority list for all categories of Generation X Canadians, including those who planned to stay in their home forever.
Nupi Zubair, associate vice-president of retail products at TD, said, "It's possible to own a home and not feel handcuffed to the mortgage, but it does require careful saving and planning before signing on the dotted line. Buyers need to purchase a home at a price they can afford, while still budgeting for the other things on their list of priorities."
Zubair said that, in addition to the sale price of the home, buyers need to factor in other costs of homeownership - such as taxes, maintenance, closing costs and insurance - and set a budget for all of the discretionary things they want to do.
"One way to have more disposable income every month is to make a larger down payment up front, which ultimately reduces the size of the mortgage and monthly payments," Zubair said. "Keep in mind, though, a shorter amortization period and making payments weekly, rather than monthly, can increase overall monthly payments but lower the overall costs of the mortgage. It really comes down to the buyer's priorities."
TD created this infographic with its survey results and tips for home buyers.