Saving up for a down payment: The young adult's struggle
In an era where rates of savings are down, it appears to be
increasingly harder for first time buyers to save the necessary down payment
for their first home. Many banks and financial advisers will suggest that it is
best to put the largest down payment possible on your first home but, with the
rates of savings so low there are some other things to consider. This article,
in the Globe and Mail, explores the difficulty in saving for your first home.
I found some of the information interesting, such as,
according to the article, the average home price in Canada is $295,000, the
median family income is $70,000 and the average age of first time buyers is 34.
I would be curious to see some stats for Alberta where the average house price
is quite a bit higher than the average. I would also guess that the average
family income is higher than $70,000 and that the average age of a first time
buyer in Alberta is quite a bit younger than 34.
If you are struggling to get your down payment together, you
may find some truth in the article.
Saving money for a downpayment is a certainly a big stumbling block for those who are planning to buy a house. Ideally, it would be best if you put down a larger deposit like 30%-40% to secure a better interest rate. Reducing your mortgage rate even by just 1% can save you thousands of dollars over the full term of your loan.
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