Jennifer Deane, 47, and her daughter Olivia, 18, plate lettuce as they prepare dinner in their North Vancouver, B.C. home on May 15. Deane’s husband Ronan, 48, stands to the right while her younger daughter Greta, 14, fills a jug of water in the back.Kayla Isomura/The Globe and Mail
On July 3, Jennifer Deane and her husband close the sale on their 2,700-square-foot family home in North Vancouver.
A few days later, they take possession of an almost-new 1,920-square-foot townhome. This is a story of downsizing, but not the traditional way. Ms. Deane is 47, her husband is 48 and the couple has daughters aged 14 and 18 living with them right now.
The family is moving to find more financial flexibility. Owning their current home is a financial burden, and the stress would only get worse with a mortgage renewal coming up soon.
“This is a trade-off,’” said Ms. Deane, who runs her own leadership coaching business. “It’s square footage for independence.”
We’re in the middle of a wave of mortgage renewals where higher interest rates than we’ve seen in the recent past are driving up monthly payments. Families across the country are asking, how can we afford this?
Some are extending amortizations to lower their monthly payments, some are slashing spending or resorting to debt and some will have to sell. Ms. Deane and her husband, Ronan Deane, are in the fortunate position of being able to keep their home. They just don’t want to – not at what it costs them now and, especially, at what they’d have to pay after a looming mortgage renewal.
There’s a little more than $600,000 left on their mortgage, which is coming to the end of a five-year term at 2.2 per cent. Ms. Deane estimates her payments would rise by $800 to $1,000 per month at prevailing mortgage rates, which range from 5 to 6 per cent.
The Deane family sits outside of their home in North Vancouver, B.C., on May 15.Kayla Isomura/The Globe and Mail
Selling the four-bedroom family home they bought 10 years ago will save loads of money each month. Proceeds from the sale plus a cash top-up will mean they can live mortgage-free in their new three-bedroom townhouse. Current mortgage costs are $3,965 per month.
As well, Ms. Deane has estimated that her family will save on electricity, heating, insurance, property taxes and maintenance. Even with strata/condo fees of $710 per month at the new place, Ms. Deane calculates overall savings of $4,640 per month.
You’re living the Canadian dream if you own a big house with a yard. But Ms. Deane found that even on the $250,000 gross income she and her husband bring in each year, they had a lean lifestyle that required them to regularly dispense with things such as takeout meals and travel to avoid debt.
“The issue is that we have too high a mortgage for our income, even though our incomes are relatively high,” she said.
Ms. Deane and her husband considered trying to get jobs that paid more, but both of them were happy with their career and work-life balance. The idea of downsizing came to her about a year ago and solidified as she listened to podcasts about achieving financial independence.
“I had to bring my husband along, and then it was the kids,” she recalled. “They didn’t want to move.”
Her daughters came on board after visiting the townhome and liking its newness. It helped that the townhome was under two kilometres from their current home and in the same school district.
The Deane family sits in the living room of their home in North Vancouver, B.C., on May 15.Kayla Isomura/The Globe and Mail
After convincing the daughters came the job of explaining the move to friends and family.
“My parents still live in their large family home, and they enjoy that,” Ms. Deane said. “But I think they understand exactly what we’re doing because of the mortgage. Ronan and I have looked at each other and said if we didn’t have such a large mortgage, we probably would stay where we are.”
Moving requires that Ms. Deane and her family get rid of 50 per cent of their stuff. The townhome is narrower than their current home, while another adjustment is that there are more stairs. But the townhouse does offer some outdoor space, and the promise of a more turn-key lifestyle than a big family house with a landscaped yard. That yard is symbolic of the changing role of their home.
“I honestly believe that having the house for the 10 years that the kids were small was amazing,” Ms. Deane said. “It was a gift. It was wonderful. But they don’t use the yard any more.”
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