You are trading, not cashing out
Unless you are moving to a rental, you sell into the same market you buy into. A hot market gets you more for the house and charges you more for the condo. A soft market does the reverse. The spread between the two prices is the real number, and it moves far less than either price alone.
Carrying costs while you wait
A large family home costs money to hold: property tax, insurance, heating, and maintenance on systems that are aging. Several years of waiting for a better price frequently consumes more than the price improvement delivers.
- Property tax and utilities on unused square footage
- Deferred maintenance compounding into larger repairs
- Rising insurance costs on older systems and roofs
The sequencing problem, and how to solve it
Most downsizers want to buy before they sell so they are not homeless between closings, but they need the sale proceeds to complete the purchase. Bridge financing solves this for short gaps. For longer gaps, or where the new home is a pre-construction condo, a short-term equity loan against the existing home can cover the deposit and possession period.
Condo fees change the budget
A smaller home is not automatically a cheaper one. Condo fees, special assessments, and parking or locker costs replace the maintenance you used to do yourself. Compare total monthly carrying cost, not purchase price.
Frequently asked questions
- Should I sell first or buy first when downsizing?
- Selling first is financially safer. Buying first is possible with bridge financing once your sale is firm, and it removes the pressure of finding a place in a narrow window.
- Can I get a mortgage as a retiree?
- Yes. Pension, RRIF withdrawals, and investment income all count. Some lenders also offer equity-focused programs for older borrowers.
Talk to a Toronto private mortgage specialist
We arrange equity-based financing across Toronto and the GTA, whether you need a first position from a private lender or a second mortgage behind the bank you already have.