Delayed Dreams of Home Ownership for Millennials

Millennials are considered to be within the age range of 22 and 37 years old in 2018. More millennials today are renting for longer or lengthening their stay with family while trying to save a property down payment our harder to afford housing market.

As of January 1, 2018, new mortgage rules subject buyers to stricter qualifying criteria, known as a ‘stress test’. The stress test determines if a homebuyer could still afford their principal and interest payments should interest rates increase. This stress test uses either the 5-yr benchmark rate published by the bank of Canada or the customer’s mortgage interest rate plus 2%, whichever is higher. *

We’ve seen the new mortgage rules greatly affect buyer’s ability to qualify for a mortgage, even if they can safely afford the monthly payment based on today’s interest rates. The stress test has forced buyers into a lower price range or out of the market completely.

With that said, what can you do to increase your down payment savings?

Budget! If you don’t tell your money where to go, you will have no clue where it went. Saving money is more successfully done when you have and stick to your budget. For two great online budget resources Google Gail Vaz-Oxlade budget worksheet, or Dave Ramsey budget tool.

Rent a room. Instead of having an entire place to yourself, consider renting a room or a basement suite to save as much as possible every month. With your landlord’s approval you could bring in a new roommate to help share the living expenses. Whatever money you save or collect, set it immediately aside into a house savings account.

Sell or downsize your vehicle. Vehicle ownership is costly! When you add up your monthly payment, insurance, fuel, maintenance etc. most are spending between $500-$1000 every single month. How much could you save each month by downsizing your vehicle? How much would you save if you took the transit, biked, walked, hired an Uber or rented a car when needed? If you and your partner have 2 cars, could you consider getting rid of one?

Live for less. If you buy books, try the library. If you watch TV, drop your cable and reduce movies to Netflix. If you eat out a lot, look for cheaper alternatives or eat at home more. If you buy a lot of clothes, buy gently used or set up a clothing swap. With a clothing swap, gather friends having them all bring gently used clothing. For every piece of clothing they bring, they receive a ticket that allows them to take other articles of clothing for free. Take advantage of free community events. Use Kijiji or BuyNSell groups for anything and everything.

Borrow from your RRSP. If you already have RRSPs, you can withdraw up to $25,000 ($50,000 per couple) to buy your first home. As long as your RRSP withdrawal is paid back within 15 years (every year contribute at least 1/15 back) it is not taxable. Speak with your financial planner for more.

These steps take time, however when executed diligently you will find yourself in a stronger homeownership position in far less time. We know you can do it!

If you’re considering buying or selling a home, be sure to give us a call! It is always our highest honour to serve you!


Jason Rustand with RE/MAX Real Estate serves with the highest level of integrity and excellence every time.  For more info on this topic or others related to real estate contact LIKE our Jason Rustand Team Facebook page, call Jason direct at 780.980.2828, email or visit





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