- TD Canada Trust releases 2010 Home Buyers Report -
TORONTO, July 5 /CNW/ - Atlantic Canadian first time home buyers have their hearts set on new, large, fully detached homes. More than in any region province, 83% of Atlantic Canadians bought or intend to buy a fully detached home (versus 58% nationally) and 73% want a new home. Atlantic Canadians are also most likely to say they would prefer a larger home (60% versus 45% nationally) to a smaller home even if it means a longer commute. This is according to the first TD Canada Trust Home Buyers Report which surveyed Canadians who have purchased their first home in the past 2 years or who intend to purchase a home in the next 2 years.
To finance their first home, 87% of Atlantic Canadians took out or expect to take out a mortgage. Only 13% of respondents plan to have more than a 20% down payment. The remaining 87% will require their mortgage to be insured by organizations like the Canada Mortgage and Housing Corporation (CMHC). More than half (54%) of Atlantic Canadians are worried about being able to afford their home if interest rates rise.
"It's only natural to want your first home to be the home of your dreams, but it is important to be realistic about what you can afford as a down payment and what that will mean for both the type of home you buy and for your mortgage payments over time," says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. "I advise first time home owners to consider a larger down payment because a 10% or greater down payment will make a big difference. It may mean that you need to save longer before buying your first home, but it will pay off in the end. Speak with a representative at your bank about setting up an automatic savings plan to help you save."
Home financing:
Most Atlantic Canadian buyers report putting down as much as they can afford for a down payment (85%). Sixty-one per cent say they saved or plan on saving for two years or less for their home purchase. Two-thirds (64%) say they expected or expect to pay less than the asking price for their home. Only 4% expect to pay more, while 31% expect to pay the asking price.
Seventy per cent of those surveyed in Atlantic Canada have or plan to have a fixed-rate mortgage. "Historically you are more likely to save interest costs with a variable rate or short-term mortgage option, so if they can handle some volatility then I recommend buyers choose a variable rate. If people are adverse to interest rate fluctuations then a fixed-rate is best," says Haque.
Atlantic Canadians do their homework
Nearly all home buyers are making informed financial decisions before buying their home. Top activities before buying a home include estimating utility costs (90%), calculating closing costs (89%), learning about mortgage options (87%) and getting pre-approved (86%). Closing costs, legal fees and land transfer tax were the top three costs that buyers felt unprepared for (47%, 47% and 43% respectively).
Home shopping process:
Atlantic Canadian buyers do their due diligence when searching for a home. People in the region, spend the longest time searching for a home, almost ten months, compared to the national average of only 8 months. People in the region view approximately 12 homes before buying.
Not surprisingly, price is the most important factor when considering what kind of home to buy and where (99%). This is followed by layout of the home (96%) and features of the home (94%).
Although they take their time shopping for a home, not every Atlantic Canadian buyer plans to spend many years in their first home. More than a quarter (27%) of buyers in Atlantic Canada plan to spend less than 6 years in their first home. On the other hand, one in five (20%) do not ever plan to sell their home.
About the TD Canada Trust Home Buyers Report:
Results for the TD Canada Trust Home Buyers Report were collected through a custom online survey conducted by Environics Research Group. A total of 1,000 completed surveys were collected between June 8-21, 2010, including 70 respondents from Atlantic Canada. All participants either purchased their first home within the past 24 months, or intend to purchase their first home within the next 24 months.
About TD Bank Financial Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Financial Group. TD Bank Financial Group is the sixth largest bank in North America by branches and serves more than 18 million customers in four key businesses operating in a number of locations in key financial centres around the globe: Canadian Personal and Commercial Banking, including TD Canada Trust and TD Insurance; Wealth Management, including TD Waterhouse and an investment in TD Ameritrade; U.S. Personal and Commercial Banking, including TD Bank, America's Most Convenient Bank; and Wholesale Banking, including TD Securities. TD Bank Financial Group also ranks among the world's leading online financial services firms, with more than 6 million online customers. TD Bank Financial Group had CDN$574 billion in assets on April 30, 2010. The Toronto-Dominion Bank trades under the symbol "TD" on the Toronto and New York Stock Exchanges.