If you are new to Canada, you may be challenged by the question to whether buy a home or rent one. For many new Canadians owning a house is a huge emotional achievement. Owning a home in so many ways signifies your new roots.
This Genworth video explores some options before jumping in:
When to buy a house? If you are moving to a new city and hope to spend there more than 3 or 5 years, be it for a job related reasons or because of your kids’ schooling, purchasing a home is recommended.
Advantages of buying: A major advantage to buying a house over renting, especially for new Canadians like you, would be the pride of owning your own home in Canada. It will help you establish yourself in the community, know your neighbours and give you a nice feeling of belonging. More importantly, you will be paying down your mortgage over a period of time and create wealth, build equity in your home.
When to continue renting? If you move to a city for a short period of time, for example, a one or two years job contract, or if your financial situation is expected to change over the next year or so, it is better to rent.
Lifestyle changes: This is the most challenging part of transitioning from renting a house to purchasing one. There are a lot of financial disciplines that need to be put in place; as well, you have to start budgeting for one. One thing you really need to do is to make sure that you have an emergency fund. With homes or condos you may encounter some problems or unexpected issues, such as a leaky roof, a basement flooding or a pipe bursting.
The transition from renting to owning: As a new Canadians you need to definitely establish credit history in Canada. You can start that by getting a credit card or applying for a small loan, and making payments regularly. More importantly, you need to start saving for your down payment. However, note that even with as little as just five per cent down payment, along with a mortgage insurance, you can actually own your home in Canada.
For more information on purchasing a house in Canada, browse our Housing section and watch the available videos from Genworth.