It’s time to consider how your current home will fit in your retirement
At each life stage, it’s important to examine your lifestyle and financial situation to make sure that your home still meets your needs. As you approach retirement, you may find that you have more space than you need. Your lifestyle priorities may have changed, and freeing up the equity in your home could help you afford to do other things more often, such as travelling.
As you plan for retirement, consider what you want from your golden years to determine whether it makes more sense to stay in your current home or to downsize. Farhaneh Haque, regional manager, mobile mortgage specialist at TD Canada Trust, offers the following factors to consider:
• If you plan on travelling or spending a lot of time at a recreational property, you may not need as large a home. Further, if you downsize to a condo, the added security can be reassuring when you leave your home unattended for long periods of time.
• Downsizing usually means less maintenance, in fact moving to a condo can eliminate chores like shovelling and yard work. The TD Canada Trust Condo Poll found 64 per cent of people named this as the top reason for choosing to buy a condo.
• Downsizing will probably mean giving up extra rooms to host friends and family. You might find, however, that when your grandkids discover your new condo has a pool, they’re less upset about having to sleep on the couch. For adult guests, explore whether your condo building has guest suites available.
• Downsizing could help you pay off your mortgage faster or even completely. Or, if you’re already mortgage-free, money earned from the sale of your home can help fund other retirement dreams.
• Consider the price range for homes you would move to, compared to the estimated value of your home to determine how much money you could earn from selling your home and buying another one. Remember, there are costs associated with moving.
If you’re selling to generate extra income, ensure the difference in cost is greater than your moving expenses, such as movers and closing costs. Also, if you move from a house that you owned mortgage-free to a condo, don’t forget to consider monthly condo fees.