Down payment, job security and readiness top concerns among women
TORONTO, May 14, 2012 /CNW/ – Among Canadians who plan to buy a home within the next two years, women (49 per cent) are more likely than men (35 per cent) to be first-time homebuyers, according to the 19th Annual RBC Homeownership Poll. Overall, 51 per cent of women and 65 per cent of men who are likely to buy in the next two years already own a home.
“We are seeing more single women entering into the housing market, as income levels, changing demographics and lifestyle patterns shift purchasing habits,” said Marcia Moffat, head of home equity financing, RBC. “But women are being more cautious than men, weighing cost, affordability and job security before buying a home.”
Of the Canadians who have recently become first-time homebuyers, men and women were tied (47 per cent) in saying affordability was the biggest concern that prevented them from purchasing a home earlier. Women outpaced men in three other reasons that caused them to delay their first home purchase.
FAST FACTS
| Reasons first-time homebuyers had not bought before now | Women | Men |
| Previously wasn’t able to afford it | 47 per cent | 47 per cent |
| Not interested/ready for homeownership | 25 per cent | 14 per cent |
| Unsure of job security | 23 per cent | 15 per cent |
| Saving for a large down payment | 22 per cent | 14 per cent |
The idea of financial security arises once again when it comes to choosing a mortgage. The survey showed Canadian women (16 per cent), regardless of whether it was their first home or not, were less likely to take on a variable mortgage compared to men (25 per cent).
However, both sexes were similarly comfortable with the prospect of taking on a fixed rate mortgage (women: 40 per cent; men: 44 per cent), which largely reflects the current trend where Canadians are now looking to lock in at historically low interest rates. Women (44 per cent) are also more likely than men (31 per cent) to consider a combination mortgage, which has both fixed and variable rate features, allowing for peace of mind and flexibility at the same time.
Moffat offers the following five first-time homebuyer tips:
- Balance your books and assess total costs: Owning a home is a big financial decision. Balance the costs of homeownership against your lifestyle. If you like to travel or dine out often, leave yourself with enough wiggle room to enjoy what’s important to you.
- Get your (financial) house in order: Start by getting pre-approved for a mortgage, with professional advice that will help you understand the long term costs and choose the right product to suit your needs. This will give you a better idea of your price range before you start your search.
- Budget for extra costs: Don’t forget about closing costs, which can include legal fees, land transfer taxes, or a new home warranty. Closing costs are typically one to two per cent of your final purchase price. Build this into your budget along with the cost of new appliances and moving.
- Create an emergency fund: Unexpected expenses can catch you off-guard, such as a leaky roof, a replacement furnace or an increase in fees or taxes. Online tools and calculators along with expert advice can help you build a buffer.
- Add more revenue: Look for opportunities to manage housing costs, either by renting out part of the home or having a roommate. This can help offset expenses in the first few years.
Matt Gierasimczuk, RBC
