We took the plunge and sold our large family home to move to a condo apartment. People who know us were surprised – and even aghast – that we would even consider an apartment.

We were surprised too as it was not exactly on our list of preferred types of residence.  But when we went for a showing, my husband and I looked at each other and knew that this was it!

Funny how things turn out.

Should you sell the family home?

This post was originally published in July, 2011

After retirement, where you live is one of the biggest decisions you will make.  Should you stay in the same house you raised your family?  If you sell the family home should you downsize to something less expensive and invest the difference?

For a time we were thinking of selling our house and purchasing a 40-foot motor home.  We had visions of travelling all over North America and settling down for the winter in some nice balmy area.  We checked out motor homes and visited all kinds of websites devoted to the travelling lifestyle – everything from good camping spots to how to cook gourmet meals on your grill.

Once we realized this would involve a bit too much togetherness, not to mention how our three cats would handle it, we soon scotched that idea.

There are a lot of arguments for owning your own home.  For one, it’s a safety net.  Notwithstanding the recent downturn in the real estate market, a house is still one of the best investments you can own.

Downsizing Your Home

A lot of people decide to sell their large family home and buy something less expensive, whether it’s just less square footage, or a condo townhouse or apartment.  Several of my friends have done this and consider it to be the best move they’ve made.  On the other hand, when I consider this, I like the space of a larger house.

  • I’ve turned the extra bedrooms into an office and a sewing room
  • I have a dining room for family dinners and entertaining
  • I have a large basement that the grandkids can play in (once I get it organized)
  • I have the space for relatives to stay over when they visit
  • My husband and I – and the cats – have lots of space to do our own thing (see the motor home issue above)

Another disadvantage when considering downsizing is that even a smaller house will not cost that much less than the one I have now, either in price or monthly expenses, so there would be no “difference” to invest.

Mortgage or Clear Title?

The next question is whether or not to pay off the mortgage.  One rule of thumb is if the interest rate on your mortgage is less than what your investment portfolio is earning, you’re probably better off keeping the mortgage.

The flip side is that your mortgage is probably your largest single monthly expense, and by paying off your home you lower your monthly expenses significantly.  In fact, the goal of the majority of Canadian homeowners is to pay off their mortgage as soon as possible.

Tax Considerations

Canadian taxpayers are allowed one primary residence so any gain realized on the sale of the house is excluded from your income.  So, again, your home can be an excellent investment for the long term.

So, we’ll stay put for the time being.  However, I’m still perusing the MLS listings on a regular basis in the hopes of finding my dream retirement home.


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