Living space in Canada doesn’t come cheaply, so many residents are facing the dilemma whether to go for a temporary arrangement or take out a large mortgage loan to seek a permanent solution.
Worrying about rent every month is pretty bad, but is it any better when you have to service a mortgage loan or risk your home being repossessed? The answer to this question depends on every individual’s circumstances and financial power, but there are some common themes that can be explored independently of personal differences. For the purposes of this analysis, we will talk about an average mortgage in a typical Canadian town like Guelph:
Advantages of home ownership
Quite obviously, being your own landlord brings a certain peace of mind that can’t be replaced in any other way. However, there are more practical sides of home ownership, too – from a well-defined financial plan to absence of expenses and stress associated with occasional moving from house to house. Furthermore, any payment you make towards your mortgage brings you one step closer to acquiring the property for all times, while the money spent on rent has no long-term implications.
Dangers of long-term commitment
Tying up your future finances in a particular property can be tricky if your life takes a sudden turn in unexpected direction. Job offer in a different city, family emergency, new marriage – there are plenty of reasons why you might want to change your mailing address in a few years. A mortgage greatly complicates such matters and forces you to skip on some opportunities and stay the course even when you don’t really intend to. Be careful when you are falling in love with a house – you might have to live in it for a good number of years.
Strict governmental regulations
Canada is well-known for its strict regulation of the mortgage industry, and any applicants must meet predefined financial criteria to qualify for the loan. Even if you are eligible for a mortgage, the size of the loan will be calculated based on objective parameters that you might not be able to control. Learning all the applicable rules can help you identify the most favourable situation that works for you. All the administration may seem difficult to navigate, but it could actually work in your favour if you know what you are looking for and have the means to pursue it.
Many forms of mortgage loans to choose from
When it comes to interest rate, Canada offers a variety of possibilities for future homeowners. Most people prefer fixed rate mortgages that are resistant to price shocks, but some opt for variable rate loans that depend on the prime rate set by the Bank of Canada. Competing providers offer personalized packages that come with additional benefits, so you shouldn’t settle for the first deal you see. With so many mortgage products to offer, you will probably be able to find one that’s tailor-made for you.