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Trend Alert: Downsizing

Lately, we've been getting more calls from clients wanting to downsize once their kids head off to university. This curiosity has become increasingly common.

The Lightbulb Moment

COVID-19, rising interest rates, and inflation have prompted many to reassess their lives and spending habits. People are recognizing the potential of their home equity and how freeing it up can enhance their quality of life.

Taking a Closer Look

That dream house, perfect street, and big yard you once valued might not mean as much now. Often, only a small portion of the house is actually used.

What Downsizing Could Mean

For some, downsizing can enable semi or early retirement. For others, it eliminates mortgage worries and unnecessary expenses. It could also mean checking off bucket-list travel adventures or acquiring a vacation property.

Consider the Scenarios

Assess how downsizing could transform your finances and lifestyle.

What If the Kids Come Back?

That’s a big question! Plenty of options with 3+ bedrooms can still welcome them back temporarily. But as the expression goes, if you want them to move on, 'stop cooking with cheese'... maybe the big comfy house with all that room is the cheese.  

Meet the Downsizers

‘Jim & Laura’ represent many of our clients' downsizing journeys. Recognize anything familiar?

Jim & Laura had lived in their home for a decade. They have two kids – one recently graduated from university and started their first full-time job, and the younger one is in their second year of university, living off-campus.

Their 4+1 bedroom home in prime Beach, set in a coveted school district on a gorgeous property, seemed perfect. They refinanced once for a renovation, lowering their mortgage to a manageable level – or so they thought until their fixed term ended.

Laura dreams of extensive travel, starting with Europe, and might quit her corporate job to freelance if finances allow. Jim, weary of Canadian winters, can work remotely and longs for warmer climates down south.

Knowing their youngest might return home for a year or so after graduation, they were aware of their significant equity and high monthly expenses from the mortgage, property taxes, and maintenance.

After crunching the numbers, they realized it was cheaper to help their son rent short-term than to keep their current home and let the equity sit idle.

The Sell: They sold their home for just over $3.5M, leaving them with approximately $2.5M in equity.

The Buy: They purchased a 2-bedroom + den condo with 2-car parking for just under $1.6M in the same neighbourhood.

The Gamechanger: With no mortgage, the remaining equity was invested, and the gains from those investments fund their luxurious travels.

Where Do You Start?

Determine your home’s value and explore downsizing options. Meet with one of our specialists to see how your future could change. Reach out at info@thedurhamlife.ca.