How often have you heard the real estate lament: How I wish I’d have known at the beginning what I know at the end? These real estate tips have been designed to give buyers, borrowers and homeowners the basics on buying a home and getting a mortgage in Canada today.
According to a Canada Mortgage and Housing Corporation study, resale house prices rose faster than inflation in 23 of 27 major Canadian cities between 1971 and 1996 – even in years when inflation ran rampant throughout Canada.
With a 25% down payment, you’ve really earned 4% a year tax-free on the money you’ve invested. And if you buy a house with only 10% down, over five years your annual tax-free return is 10%. Of course, if you can avoid it, never buy a house with the smallest possible down payment, as mortgage interest is not tax-deductible. But the tax-free capital gains are added to the power of leverage, real estate remains a good investment.