TORONTO, Ontario, October 28, 2010 — For their next move, Canadian boomers are looking to downsize to smaller homes. According to the TD Canada Trust Boomer Buyers Report, four-in-five Canadian boomers say their next move will be to a smaller home, either to save money (46%) or to enjoy more luxurious features (34%).
"Many boomers find that their needs and priorities have changed since they moved into their current home. If you find you have more room than you need, consider 'right-sizing,'" says Farhaneh Haque, Regional Sales Manager, Mobile Mortgage Specialists, TD Canada Trust. "Moving to a smaller home can allow you to free up assets to put towards your retirement savings or enjoy in other ways."
Retiring with a mortgage?
Three-quarters of boomers say it is important that they pay off their mortgage before they retire, but less than half (44%) have paid off their entire mortgage. Of those boomers with a mortgage, one-third have paid off more than 60%, but one-quarter have a long way to go, having paid off less than 25% of their mortgage.
Haque offers this advice for boomers working to pay off their mortgage: "Talk to an expert about your home financing - you could pay off your mortgage faster with a different payment schedule, such as increasing your mortgage payment frequency from monthly to biweekly."
Boomers prefer detached homes:
For their next home, the majority of boomers (61%) plan to purchase a detached house. Although condos come in as second choice at 24%, more than half say they are at least considering a condo because they involve less maintenance (84%) and offer better security (54%) and amenities such as a gym or pool (47%). The top reasons that most boomers prefer houses over condos are that they prefer to have a backyard and garden (61%) and don't want to pay condo fees (57%).
However, some boomers say they will stay put. Forty-nine per cent will not move, either because they want to avoid the hassle of moving (61%), because their house is already the right size for them (43%) or they like having extra rooms for guests to visit (28%).
Boomers heading South:
Nine per cent of boomers currently own a vacation property and a further 12% plan to buy one for their retirement.
More than a third of boomers are considering buying a property south of the border. One quarter say opportunities created by the depressed real estate market have sparked their interest, while another 12% were already considering real estate opportunities in the United States. The most important criteria for buying a vacation property include location (99%), price (98%), low maintenance (95%), and the ability to have friends/family visit (92%).
"It is essential to talk with a qualified mortgage advisor if you are considering a property purchase in a different country," says Haque. "While there can certainly be opportunities, it is important to consider lending rules and taxes. An expert can help walk you through the paperwork and decide whether a property in another country really is an affordable option."
About the TD Canada Trust Boomer Buyers Report
Results for the TD Canada Trust Boomer Buyers Report were collected through a custom online survey conducted by Environics Research Group. A total of 1,000 completed surveys were collected between Sept. 30-Oct. 9, 2010. All participants were screened to have been born between 1946-1964 ("Baby Boomers"). This is the third report in a series on the life stages of Canadian home buyers. It follows the first time home buyers report and the repeat home buyers report.