Life's other big ticket items can impact the size of a mortgage
First-time home buyers may need to trim costs to put themselves in a good financial position to purchase.

Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.
Article content
First-time homebuyers are likely going to have to be more creative when it comes to budgeting this year in Edmonton’s increasingly pricey resale real estate market.
Realtors Association of Edmonton statistics from the end of 2024 reveal the average price of a home grew more than 12 per cent year over year to reach $435,549.
Prices increased by double-digit percentage points across all housing types, with the most affordable segment, apartment condominiums, seeing the most sizable percentage gain.
By Dec. 31, the average price for the segment had reached nearly $204,000, an increase of nearly 20 per cent year over year.
“With first-time homebuyers these days, we definitely have to sit down with them and have a big budgeting conversation,” says Aaron Farrell, a real estate agent with Exp Realty in Edmonton.
The upside for these buyers is Edmonton is more affordable than a lot of other major markets, as a recent study by Zoocasa points out.
The report, published in December, tries to illustrate first-time buyers’ affordability challenges, using the daily cost of a coffee/latte as a measuring stick.
It calculated how long, based on the price of a caffeinated drink — pegged at $5.19 — it would take to save up for a down payment.
Although a first-time buyer would hopefully be setting aside more than this relatively meager daily expense for a down payment, it helps reveal relative affordability between major Canadian cities.
In Edmonton, for instance, Zoocasa found a first-time buyer would have to save 59 years of daily coffees to get nearly $80,000, roughly a 20 per cent down payment for the average home, cited at about $396,800 in the report.
In contrast, first-time buyers would need 157 years in Toronto to save a 20 per cent down payment, about $212,060 for the average priced home at $1,060,300.
Farrell says that while visits to Starbucks or Tim Hortons can add up over the course of the year, this spending isn’t the challenge.
“More than worrying about the cost of a cup of coffee, it’s really important to cut down on the big expenses.”
Automobile and other sizable loans are much more impactful, limiting the amount of mortgage they can qualify for to purchase a home.
Time is equally important, often friend or foe of first-timers, says Nathan Mol, associate realtor with Liv Real Estate.
“Some are planning on buying a home in five years or more, and others are hoping to buy a home in the next three to six months,” he says. “Each situation is different, and some principles will be the same, but different budgeting strategies will be more important for each buyer.”
Those with a few years to buy have more tools. First, they can eliminate debt — like ongoing credit balances and student loans — before they seek a mortgage.
Mol notes more time also affords them the ability to use savings programs, like the First Home Savings Account. Contributions to the account are tax-deductible and can be withdrawn tax-free to purchase a first home.
Another is the Home Buyers Plan that lets first-time buyers borrow from their RRSP for a down payment.
Regardless of the timeline to buy, budgeting remains crucial, not only to save for a down payment and eliminate debt. It helps with being able to afford all the costs that come after the purchase.
“Identify where you can cut back,” Mol says. That might mean eliminating discretionary costs like entertainment, but it doesn’t have to be all budget drudgery.
“Write down every win when cutting an expense,” he adds. “But you can also set up small rewards for yourself along the way for hitting financial milestones.”
Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information.