Downsizing has become a common choice among Canadian homeowners, particularly for empty nesters and retirees. If you're considering downsizing, here’s a breakdown of the key financial benefits:
Lower Mortgage Payments
One of the most immediate financial benefits of downsizing is a reduction in your mortgage payments. A smaller home generally means a smaller mortgage, which could lead to significant savings each month.
Reduced Property Taxes
Property taxes are often based on the size and value of your home. By downsizing, you’re likely to see a drop in your annual tax bill.
Lower Utility Bills
Utility bills such as heating, cooling, and water are generally higher in larger homes. Downsizing to a smaller property means fewer square feet to heat and cool, potentially saving you 30-50% on your energy bills.
Reduced Home Insurance Costs
A smaller home generally comes with lower insurance premiums, as insurance companies base their rates on the size and value of the property. Downsizing can therefore help reduce this ongoing expense.
Potential Savings on Transportation
Relocating to a smaller home in a well-connected area can save you money on transportation. Whether it’s access to public transit or walking distance to essential services, downsizing may allow you to give up your car, saving on fuel, insurance, and maintenance costs.
Sell Unwanted Items
Larger homes often lead to accumulating more items over time. Downsizing gives you the chance to declutter and reduce unnecessary belongings. Plus, selling unwanted furniture and items online can provide extra cash during the downsizing process.