Many renters dream of taking the money they spend on rent and using it for mortgage payments. But there's a lot more to buying and owning a home than just paying the mortgage. There are real estate and legal fees, home inspection and moving costs, property taxes, utilities and interest rates.
One of the best ways to determine if you can realistically afford to buy a home is to sit down and crunch the numbers.
Instead of using a hand-held calculator or a pencil and paper, you can check out the new online Rent or Buy calculator at www.ic.gc.ca/oca/rentorbuy. It's free and it gives you an instant snapshot of your potential as a home buyer.
Developed by Industry Canada, the calculator simply asks you to enter your current financial information (such as any savings you might have, the cost of your rent and utilities, the interest rate you might get on a mortgage) and the calculator does the rest for you. It shows you the maximum house price you can afford, the down payment needed, your closing costs, and how much money you'll need to cover all your monthly expenses, including mortgage payments, property taxes and utilities.
The web page also has links to other Government of Canada tips and resources on buying or renting a home and mortgages.