For newcomers to Canada, finding a place to live may be a top priority.
With many housing options available, it can be hard to choose between renting and buying and you might wonder whether a short-term or long-term solution is better for you. In this article, we will explore the benefits and drawbacks of both renting and buying.
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Renting a Home
Renting a home is a good option, especially if you appreciate flexibility and aren’t ready for a long-term commitment. It allows for easier relocation if needed and removes the responsibility for many major repairs or maintenance, often resulting in lower upfront costs.
However, it’s important to keep in mind that renting means you won’t be building equity in the property[1], and there may be restrictions on pets or decorating your space. Additionally, there is no guarantee that the landlord will renew your lease once it expires, which may create uncertainty.
When deciding whether to rent, there are a few important factors to consider. First, think about your budget. This should include not only the rent but also extra costs such as utilities, internet, renter’s insurance, etc. Next, it’s a good idea to read and understand the lease terms and conditions. Fully understanding your lease can help you avoid surprises later. Finally, get to know your tenant rights and responsibilities under Canadian law. Being informed will help you have a better renting experience.[2]
The Canada Mortgage and Housing Corporation (CMHC) also offers a helpful guide on renting a home in Canada that you can download for free.
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Buying a Home
As a newcomer to Canada, buying a home may be a significant financial commitment. However, it can also provide a strong foundation for putting down roots in your new community. Buying a home comes with added responsibilities such as mortgage payments, home insurance, maintenance, repairs, and property taxes.[3]
Before you start shopping, know what you’re looking for in a home. Consider what you want now, and what you might need in the future. Some important factors to consider[4] include the size of the home, location, type of home (e.g. Condominium, Townhouse, Semi-detached, Detached, Duplex/Triplex), etc.[5]
You might also need a mortgage to help finance the purchase of your new home. As a newcomer to Canada, this might be one of the challenges, especially if you haven’t yet built a Canadian credit history. Fortunately, there are options available. TD Bank offers tailored solutions to help newcomers finance their first home. With the support of a TD Mortgage Specialist, you can find out if you’re eligible for a TD Mortgage or Home Equity FlexLine and receive step-by-step guidance through the process. TD also offers flexible mortgage features, like adjustable payment frequency and lump sum payments options, making homeownership more accessible and manageable.
The Canada Mortgage and Housing Corporation (CMHC) provides a helpful guide on home buying in Canada that you can download for free.
Two Additional Considerations:
Whether you’re looking to rent or buy a home in Canada, here are two more factors to bear in mind beyond budget, location, and size of home.
- Renting: Make sure you know what your prospective landlord requires such as credit check, rental history, and proof of employment or income.
- Buying a home: Stay informed about the local housing market. Whether it’s a buyer’s or seller’s market may affect your ability to negotiate a good price. It’s also a good idea to research the community and neighbourhood, especially if you have children or are looking for access to schools, amenities, and safety.
So, should you rent or buy?
There’s no one-size-fits all answer – it all depends on your personal circumstances and long-term plans. Whichever path you choose, the information provided here might be able to help you make your decision.
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Why Choose TD?
150 years helping Canadians:
TD has a proud history of delivering financial solutions to Canadians for more than 150 years. TD also brings a century of experience helping newcomers navigate the unique challenges of the Canadian banking system.
With over a thousand branches, a reputation for excellence in financial services, and the ability to also serve you in more than 80 different languages, TD has become one of the largest and most trusted banks in Canada, now serving 16 million Canadians.
TD offers online support and resources of interest to newcomers on topics such as banking basics, moving to Canada, credit score essentials, and more. TD is open longer hours for your convenience and has thousands of ATMs across Canada to help you take care of your everyday banking needs quickly and easily.
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Book an appointment to talk with a TD Personal Banking Associate about the TD New to Canada Banking Package. You can book online right away, or visit the TD website to learn more.
Legal Disclaimer:
Information provided by TD Bank Group and other sources in this article is believed to be accurate and reliable when placed on this site, but we cannot guarantee it is accurate or complete or current at all times. The information in this article is for informational purposes only and is not intended to provide financial, legal, accounting or tax advice, and should not be relied upon in that regard. This information is not to be construed as a solicitation to buy. Products and services of the TD Bank Group are only offered in jurisdictions where they may be lawfully offered for sale. All products and services are subject to the terms of the applicable agreement. The information in this article is subject to change without notice.
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[1] Official website of the Government of Canada – https://www.canada.ca/en/financial-consumer-agency/services/renting-first-apartment.html, (Accessed on October 4, 2024)
[2]Canada Mortgage and Housing Corporation, ‘Signing a Lease’; https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/content/en/r8.pdf?rev=2aae7eaf-e357-4af9-9834-7a580ceeb8a9, (Accessed on October 4, 2024)
[3] Canada Mortgage and Housing Corporation, ‘Buying Your First Home in Canada – What Newcomers Need to Know’ Page 1; https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/pdf/66144.pdf?rev=ca92f6ab-a98d-487b-9a36-4f7381b9d727, (Accessed on October 4, 2024)
[4] Canada Mortgage and Housing Corporation, ‘Buying Your First Home in Canada – What Newcomers Need to Know’ Page 2; https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/pdf/66144.pdf?rev=ca92f6ab-a98d-487b-9a36-4f7381b9d727, (Accessed on October 4, 2024)
[5] Canada Mortgage and Housing Corporation, ‘Buying Your First Home in Canada – What Newcomers Need to Know’ Page 4; https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/pdf/66144.pdf?rev=ca92f6ab-a98d-487b-9a36-4f7381b9d727, (Accessed on October 4, 2024)