A new TD Bank survey has found that 60 per cent of Canadians are willing to exceed their budget in order to buy a home.
The survey found that more than half the Canadians polled would be willing to exceed their budget by up to $50,000, even as some of Canada’s hottest housing markets have shown signs of cooling.
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"Emotions are playing too big of a role in the home buying process and are tempting buyers to spend more than they can afford," TD Canada Trust associate vice-president Roy D'Souza said in a press release.
"$50,000 might lose its sticker-shock compared to the overall price of a house, but it's still a substantial amount of money that could be used to meet other financial needs.”
The report also found that Canadians are conflicted when it comes to their own confidence as homebuyers. Nearly all the respondents (97 per cent) admitted they wished they’d factored other obligations into their mortgage budget, despite 57 per cent of those same homebuyers expressing confidence in how much mortgage they can afford.
TD offered three tips for Canadians looking to make smarter mortgage decisions, suggesting potential homebuyers plan ahead with a three-to-six-month savings buffer, factor in the costs of their own lifestyles, and be prepared for the full cost of owning a home before deciding to wade into the market.
"Owning a home is a lot more expensive than buyers expect,” D’Souza said. “Buyers who don't account for these extra costs are potentially putting themselves under a lot of financial stress should their circumstances unexpectedly change, and are also risking not having enough money left over to maintain their lifestyle, and continue saving for the future."