RBC Poll: Affordability Is Turning the First Home Into the Forever Home
Nearly three-quarters of Canadians planning to buy their first home now say they want a place they can stay in for the long haul, according to RBC's latest Home Ownership Poll. That single preference removes a rung from the property ladder, and the buyers themselves pay for the missing rung, because they now have to stretch further on day one.
The same poll found that more than half of prospective buyers would consider living with parents, adult children or other relatives to make ownership work. Put the two findings together and the first home in Vaughan and across the GTA is being bought as a long-term family asset. The decisions people used to fix at the next move (who sits on title, how income is documented, whether the basement is a legal unit) now get made once, at the start, and they have to hold up for ten years or more.
A longer stay raises the price of a bad structure
The old ladder of condo, then townhouse, then detached came with a built-in correction. If you bought with the wrong co-borrower or the wrong mortgage term, you sold in four years and started over. Skipping that trade does save real money: one less round of Ontario land transfer tax, legal fees and commission. The catch is that you buy bigger sooner and live with the file far longer.
So treat the mortgage like something you'll carry through several renewals. Ask how the payment holds up if one income drops, a baby arrives, or a parent retires. A structure that only works in the best year is fragile when there is no planned exit.
Pooled income solves qualification and creates an exit problem
Lenders will often let several generations apply together, adding parents' and adult children's incomes to meet debt-service ratios. For self-employed borrowers this can be the difference between an approval and a decline. Business owners often show modest net income after write-offs, and adding a family member with steady T4 income gives the file a stable floor that many lenders, including the big banks, find easier to approve.
Before you rely on that, gather two years of personal and corporate tax returns plus Notices of Assessment, and know your gross-up and add-back figures. Then have the harder conversation. If one co-owner wants out in six years, whoever stays must qualify for the whole mortgage alone to refinance them off title. Put a written co-ownership agreement in place that covers buyouts, sale triggers and who pays what. If part of the home is rented, even to family, ask your accountant how that affects the principal residence exemption on that portion.
The basement only helps the file if it's legal
Ontario's More Homes Built Faster Act lets most residential lots hold up to three units without a rezoning, and Vaughan permits additional residential units such as basement apartments and garden suites when they meet building code and fire safety standards. That opens real options, but lenders generally count suite income only from a legal, conforming unit. A finished basement with a hot plate and a side door is a nice feature, and it won't count as income on the application.
If you're showing homes to these buyers, separate entrances and walk-out basements are now worth flagging early. Write the financing condition with enough time for the lender to review the suite, and ask the seller for permits. For existing owners, a refinance to build a legal unit for an adult child can let the next generation start building equity without leaving the family property.
Brokers now arrange 48% of first-time buyer mortgages, according to Canadian Mortgage Trends, partly because these files have more moving parts than a single-income purchase. Whoever helps you structure it, start with one test. Before you shop, picture who will still live in this house in ten years, and check whether the mortgage still works if one of them leaves.
Nearly three-quarters of Canadians planning to buy their first home now say they want a place they can stay in for the long haul, according to RBC's latest Home Ownership Poll. That single preference removes a rung from the property ladder, and the buyers themselves pay for the missing rung, because they now have to stretch further on day one.
The same poll found that more than half of prospective buyers would consider living with parents, adult children or other relatives to make ownership work. Put the two findings together and the first home in Vaughan and across the GTA is being bought as a long-term family asset. The decisions people used to fix at the next move (who sits on title, how income is documented, whether the basement is a legal unit) now get made once, at the start, and they have to hold up for ten years or more.
A longer stay raises the price of a bad structure
The old ladder of condo, then townhouse, then detached came with a built-in correction. If you bought with the wrong co-borrower or the wrong mortgage term, you sold in four years and started over. Skipping that trade does save real money: one less round of Ontario land transfer tax, legal fees and commission. The catch is that you buy bigger sooner and live with the file far longer.
So treat the mortgage like something you'll carry through several renewals. Ask how the payment holds up if one income drops, a baby arrives, or a parent retires. A structure that only works in the best year is fragile when there is no planned exit.
Pooled income solves qualification and creates an exit problem
Lenders will often let several generations apply together, adding parents' and adult children's incomes to meet debt-service ratios. For self-employed borrowers this can be the difference between an approval and a decline. Business owners often show modest net income after write-offs, and adding a family member with steady T4 income gives the file a stable floor that many lenders, including the big banks, find easier to approve.
Before you rely on that, gather two years of personal and corporate tax returns plus Notices of Assessment, and know your gross-up and add-back figures. Then have the harder conversation. If one co-owner wants out in six years, whoever stays must qualify for the whole mortgage alone to refinance them off title. Put a written co-ownership agreement in place that covers buyouts, sale triggers and who pays what. If part of the home is rented, even to family, ask your accountant how that affects the principal residence exemption on that portion.
The basement only helps the file if it's legal
Ontario's More Homes Built Faster Act lets most residential lots hold up to three units without a rezoning, and Vaughan permits additional residential units such as basement apartments and garden suites when they meet building code and fire safety standards. That opens real options, but lenders generally count suite income only from a legal, conforming unit. A finished basement with a hot plate and a side door is a nice feature, and it won't count as income on the application.
If you're showing homes to these buyers, separate entrances and walk-out basements are now worth flagging early. Write the financing condition with enough time for the lender to review the suite, and ask the seller for permits. For existing owners, a refinance to build a legal unit for an adult child can let the next generation start building equity without leaving the family property.
Brokers now arrange 48% of first-time buyer mortgages, according to Canadian Mortgage Trends, partly because these files have more moving parts than a single-income purchase. Whoever helps you structure it, start with one test. Before you shop, picture who will still live in this house in ten years, and check whether the mortgage still works if one of them leaves.
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