First-time buyers get leg-up from parents
Canadians are increasingly tapping the ‘Bank of Mom and Dad’ for home down payments, according to a recent study. A record-number of Canadians are expected to accept help from their parents when buying a house this year in the wake of more stringent lending rules, according to RateHub. According to states released by the financial tech company, 42% of BC-based buyers received help from relatives. A shocking 45% of Quebecers received help; 38% of Albertans; 33% of buyers in Manitoba and Saskatchewan; and 35% of buyers in Ontario.
Buyers in Atlantic Provinces, meanwhile, seem to be the most self-reliant when it comes to purchasing a home. A mere 18% relied on help from family members when purchasing a home. Of course, Atlantic Canada is generally home to cheaper real estate than its more western areas. The expected increased reliance on parents to by first-time buyers is perhaps unsurprising, given recent mortgage regulation changes – including a mortgage rate stress test for insured mortgages, which now requires many buyers to qualify at a higher rate – that have made it more difficult for many Canadians to afford a home. The stats, released Tuesday, are based on RateHub’s 2016 Digital Money Trends Report, which comprises survey responses from over 1,000 Canadians. RateHub also found a recent uptick in savings habits among Canadians. “Related to Canadians savings habits, RateHub is now seeing the January ‘gym effect’ for GICs and HISAs, with traffic spikes to those pages on RateHub.ca last week - RateHub saw a 33% increase in traffic to its GIC rates page, and a 53% increase in traffic to its High Interest Savings Account comparisons in the first week of January 2017, compared to the first week in December,” it said in its report.