Real Estate and Mortgage | The Saturday Weekly Review

Should I Buy A Cheaper or More Expensive House? : The Saturday Weekend Review #181




The most expensive house in the world is the one you are living in or contemplating purchasing. Owning a home becomes your world even though some people consider a roof over their heads a house and never a home.

Buying the most expensive house on the block is not something I would do unless I was paying cash or was 100% certain that I could maintain it even through unforeseen circumstances. The problem is that there are people who aren’t considering what could happen which could promote a for sale sign on their property.

Plus, if you think those are expensive homes now just wait and see what happens if you find major issues with the home down the road. Be ready to part with money you thought you had saved for something more than surprise home renovations. Whether you buy a cheap house or an expensive house you are now holding something expensive that could cost you even more.


The hometown living vibe is slowly being lost


Many families are being forced to move away from their hometown mainly Toronto and Vancouver because house prices have steadily gone through the roof. This means leaving older parents and grandparents without a support system or forcing one child to live at home to take care of their parents.

I often think about who will help my parents when the time comes but thankfully I have a sister that doesn’t live too far away from them. It’s always a hard decision to move away from home but most often parents give their blessing because they want their children to succeed.

Just having a look on at house prices in surrounding cities to the huge real estate stomping grounds for investors and struggling families it’s easy to see that house prices are rising just about everywhere.

With the average Canadian house price of $503,301 in June up 11.2% from a year ago my wife and I can’t imagine how we would have been able to get our feet wet in real estate living so close to downtown Toronto. We certainly would not be mortgage-free today either at these prices especially since we’ve started a family.

Related: How we became mortgage free in 5 years

Hot markets in Toronto and Vancouver continue to skew the national average higher. If those two cities are stripped out, the average house cost would be $374,760 in June, a 8.4 per cent increase from over the past year. – Source:CBC News Canada Housing

A reader wrote me a short email looking for answers about what he should do when it comes to buying a house. I can’t give him the answers he needs because I don’t know the entire story behind his finances and employment situation. Here’s the thing though, people are looking for anyone to tell them, it’s OK you can afford it. Don’t listen to them. Listen to your budget.

Related: Before you go any further how about downloading the same budget Mrs. CBB and I use every month for FREE. Our gift to you for being a fan of Canadian Budget Binder.

Dear Mr.CBB,

I’m a recent grand and a first-time home buyer along with my wife and was wondering if we should buy a cheaper house first or go for the expensive house with a $25,000 down-payment and hope for the best.



Beautiful houses aren’t always what they seem


Kris, here’s my take on this even though you haven’t given me much information to go on.

What was once an expensive house is now a cheap house and for many potential home buyers especially millennials this pushes them out of the housing market until they can save enough money for a down-payment and balanced budget. Even purchasing a condo, semi-detached or townhouse is out of reach because prices are astronomical to say the least.

Forget about the two-bedroom house for sale because buyers aren’t as hungry for these as the three or four-bedroom home unless you’re planning to stay in the house for a long time or build a third bedroom in the basement.

You’ll also notice the price difference to be slight so in this case I would stick to a three bedroom residence. If you plan to live in Toronto or Vancouver though you can bet that even a shed will sell so take what you can get but be warned this may be exhausting on your budget.

Who is buying these expensive houses?

You are!

If you haven’t run the numbers and run them a few more times considering potential scenarios then you better tighten the budget strings even more. Without an emergency savings homeowners turn to credit cards or line of credit to fund them through tough times. Only problem is, you still have to pay that money back.

When was the last time you got a pay raise at work?

For most this is non-existent and with rising costs with everything from groceries, petrol and utilities these increases end up eating that raise. Not everyone has a career that spits money out at them and those who are considered rich or well-off are struggling for balance. It’s no easy feat.

Related: The Ultimate Grocery Guide Canada

Even though you may consider the house prices relative to year-after-year increases even if Toronto and Vancouver skew the numbers even at an average cost of $374,000 for a house is outrageous for someone just starting out in the market. You don’t need to be an executive to buy an executive house but you sure as heck better have the money to back it.


Your expensive house is cheap to someone else


When we bought our house in 2009 in the Greater Toronto Area (GTA), detached, double garage, 2-storey for $265,000 that was at the top of our budget range but NOT what the banks would give us for a mortgage.

Paying just over $1000 a month for a mortgage was big bucks for us and kind of still is especially once you add in property taxes. Mrs. CBB and I were content with paying a mortgage and balancing a budget on one income and investing in our retirement with the rest of the cash flow.

The only problem is that most homeowners will tell you that they can’t do both any longer. Toss in saving for a kids education and paying for massive hydro bills and just about everyone is broke. Hopefully the new child tax benefit will be of some relief to families with children who are struggling to make ends meet or even to help fund retirement savings with a budget rebalance. Where you can save in one category it frees up cash in another if you catch my drift.

The retirement mentality is to live in the moment and see what happens. I’ve even read that some people don’t care about retirement because they don’t see themselves living past 65. Really? Do you know something I don’t? Excuses will never work in the financial world.

You must expect costs that will affect your overall budget every year even if you have no intentions of updating your house. You simply cannot buy a house and hope that it maintains itself. We see this happening so often where people become house poor because they go overboard and buy an expensive house that their budget can’t handle. Factor in an emergency and that same mortgage which was once affordable is now in emergency status.

We could have bought an expensive house but opted to go the upgrade house a little at a time route. If we wanted to skip the middle of the road house and invest in a fixer-upper it’s possible that we could have spent more in repairs than that middle of the house road. No ones’ house is perfect, not even brand new builds but one thing is for certain, they are a big risk.

Related: Buy the least expensive home in the most expensive neighbourhood

This is why we chose to buy low and hopefully sell high when the time is right. At this time houses in our area are selling in the 500k to 1 million range which is a huge jump from the time we started looking at houses back in 2009. Even though the housing market took a swift dip back then we have friends of ours who are making a killing by selling their house while the market is this hot.


Crash and burn or Rise and Smile


Do yourself a favour and find a house that you can afford on one income if possible WITH a balanced budget that is not out of proportion just to make home buying more realistic. When I receive emails from fans and they send me their budget breakdown I often see that they would largely skew budget categories to what they think they will spend just so they can justify buying the expensive house. It doesn’t work that way I’m afraid.

I don’t care if you’re a doctor or work at the mall if you can’t maintain the house you plan to buy on one income with wiggle room and an emergency savings fund think twice before signing on the dotted line. This goes out to couples looking to buy or for the single person hoping to get into this hot market and not miss out on the action.

Trust me when I say it was the best thing my wife and I did. She lost her new job about 2 months after we signed the paperwork for our new house. Without our budget and motivation to get through the tough times we likely wouldn’t be debt free.

So Kris, should you buy a cheap house or go the full hog and buy the expensive house? I say buy what you can afford and by afford I mean realistically and not filled with pipe-dreams. You’ll thank yourself in the end.

Would you buy a cheaper house or a more expensive house for your first home? 


Trouble I got into this week


I’m back to work at my second job but this time it’s only one day a week which works out great for me as I’m still home in the afternoon. Being home has made a world of difference for my family but most of all for me. I was getting exhausted working so much and even though I can work more I’m just not up to doing so for another 7 months. This time around my dreams didn’t come true as I lost out for a new career role but there will always be another opportunity.

I finished off the sandbox completely on Thursday including the car ramp which our son loves. He was laying on it watching television last night. I’m going to see if I can build him a bigger ramp with the leftover wood that I have in the garage next week if I get some time.

Finally we got some rain which we really needed as our grass was starting to turn a bit yellow. Honestly I was surprised how well it held up with the drought that were having although I do water a bit here and there and our son plays in the sprinkler out front or the pool in the back. The excess water helps keep the grass lush.

So far so good with Canada Post not going on strike which means the mail will keep on coming. We don’t get much in the mail these days mostly tonnes of adverts and 2 bills one of which is property taxes.

Finally let’s keep the people of Nice, France in our prayers after yesterday’s horrific scene at the Bastille.

That’s all for this week.


How was your week?


Awesome posts I published this week


Just in case you’ve missed any of my blog posts this week I will share them all below. If you are looking for past Saturday Weekend Review posts scroll down to the bottom of this post where I will list up to 5 previous weeks for you to read.

If you have a question that you would like to ask Mr.CBB fill out the Contact Mr.CBB form on the blog home page and I’ll do my best to reply to each one. If you want to share a story via a Fan Question please ensure that there is minimum 500 words and lots of details…we love details! I’m more than happy to chat via email to bring your story to life.

New: If your story submission gets chosen and published you will be entered into a yearly draw for a $25 Gift Card or $25 CDN via PayPal if you are from the USA.

Right now CBB is posting Tuesday (Grocery Game Challenge), Thursday (Personal Finance Post), Saturday (Personal Finance and Weekly Wrap-Up and a Frugal Recipe on Sunday!

Top performing CBB Post this week : How to Make Money When You’re Broke


Fan Budget Brags


nicola brag july 2016 dresser(1)You got WHAT for HOW Much?

Submit your Deal or Brag:

Saving money while grocery shopping is essential in the CBB family and that’s why we share our grocery shops every week in The Grocery Game Challenge .

Join the Budget Brag Challenge 2016 and WIN!!!

What I love the most is when my fans share their amazing shops with me whether it be groceries or other deals they find at a garage sale, online or freebies!

For 2016 if you send me your Budget Brag you will automatically get entered into a yearly draw for a surprise gift card.

If your Budget Brag gets chosen you get an extra ballot! So start sending in your brags with a photo and tell me about your deals. If you are from the USA and win I will PayPal you the money in CDN dollars. Open to Canada and USA only.

Email me at canadianbudgetbinder@yahoo.(ca) < remove brackets) or fill out my contact form by Friday each week to have your brag considered for the Saturday post.

Hi Mr.CBB,

I’ve got an awesome brag for your fans.

A friend was selling her sons bunk bed. Retail price $799 from JYSK. I got it for $40. Some scratches here and there and stickers all over it. With a bit of elbow grease be as good as new! Just what I wanted for Rhia’s room as she is moving into Wilson’s old room which is bigger! Loads of storage and no more hiding things under the bed!

Nicola D.


Making a difference (MAD)


Making A Difference Canadian Budget Binder MAD

Welcome to the 2016 Making A Difference series! Join the networking movement of Personal Finance Bloggers around the world. If you are a personal finance blogger (anywhere around the world) and would like your blog to be MAD featured simply drop me an email and I’ll explain the process to you. I’m currently booking for August and September.

This is my way of giving back to the personal finance community through networking and sharing knowledge with my fans. Today it is my pleasure to share with you the blog, Invest Wisely.


Hi CBB Readers!

I’m Beau Humphreys, personal finance coach, chief blogger and creator of  I launched this business because I wanted to create a place where I could teach people to manage their own finances. I know that it doesn’t have to be complicated and I want to help you take control of your personal financial situation, and then forget about it so you can live your life!

I wasn’t always passionate about personal finance. I worked in corporate finance for years, managing money for big companies and helping them save money, while at the same time, overspending in my personal life and getting more and more into debt.

I got so deep in debt my 20s that I couldn’t keep up with my monthly payments. I ended up seeing a bankruptcy trustee, who helped me develop a consumer proposal to my creditors. Over 60% of my debt would be forgiven, but my credit rating would be ruined for years. It was a hard choice to make but the proposal was my best option.

On the day I signed my consumer proposal, my credit rating was terrible, I had no credit cards, and had to survive on cash.

Living without credit cards changed my life.

I had to track everything that I bought and needed to buy in the future, because if I overspent on groceries or restaurants, I might not have enough for rent! This is a very sobering experience:  To be able to say “I can’t afford that.” or even “I CAN afford that!” and know these facts to be true without a doubt.

Slowly, I paid off my debt and was also able to work through the personal issues that caused me to overspend in the first place.  And a few years after that my credit rating was back to normal – I even qualified for a mortgage!

For the first time in my adult life, I had a positive net worth, and a new appreciation of proper personal financial management.  It’s important to me that others know that there is always a way to get back on track, no matter how far you’ve sunk into debt or financial disarray.

Now that I had my spending and saving under control, I started to focus in on the costs of banking and investing, and I realized that so many people are overspending on fees and so many other costs in their life.  Big banks and corporations are not your friends and are simply trying to make money for themselves.  You can choose to educate yourself on the best way for you to save money and invest it wisely.

My primary goal is to break down the barriers that make personal finance scary for many people.  I want everyone to eventually learn enough to be their own personal finance coach, and put me out of business!



Yummy Recipe


Food and grocery shopping are relevant to us because food is a large part of the budget which people struggle the most with. We all have to eat to survive but just because we have a budget doesn’t mean we can’t eat delicious home-cooked meals that are drool-worthy.the best pecan pie bars

If you are someone who would rather buy convenience foods consider cooking homemade meals or baking from scratch. Not only will you save money but you will be proud of what you’ve accomplished and you’ll see that from the smiles on those you feed.

For the past 2 years I’ve had a second Facebook page called The Free Recipe Depot where I exclusively share recipes from Food Bloggers around the world.

I also share recipes on the blog on Sunday either made by home cook and mom Nicola Don or myself.

This week our Top Recipe Pick goes to Rock Recipes for what looks like The Best Pecan Pie Bars ever! I would love to make these and I know it will be so hard to resist eating a few.


Cool Pinterest Find


Classic Outdoor Games

Now that we have an almost 2-year-old under our roof we are always looking for ways to entertain him especially over the summer. I came across this pretty cool blog post over at The Dating Divas that has 65 solid ideas on how a family can incorporate fun party games in the summer that won’t cost a fortune.


Editor’s Choice


Every week I will pick a blog post of the week from around the web that I found interesting and want to share with all of you. Please head on over and give the post a read and let them know that Mr. CBB sent you if you comment. Thanks.

Editor’s pick (That’s me Mr.CBB) This week I read a post over at Dream Beyond Debt for a realistic look at housing from her perspective with a post titled, “It’s Just A House“. If you think about the message she is trying to send out to everyone it really puts today’s blog post into perspective.


Finance Quote Of the Week


Quote fall asleep with a dream and wake up with a purposeQuote fall asleep with a dream and wake up with a purposeWhen I first spotted this quote I immediately thought about all of those times I was stressed out about going back to school and how I would make it with my new life in Canada.

There wasn’t many days that passed where I didn’t think about my goals and how I would turn them into a reality.

I still do this on a regular basis because going to bed with a dream and waking with a purpose is all the motivation I need to get the job done.


Google Search Giggles


Every week I get thousands of people visit Canadian Budget Binder because they did a search online and found my blog. If you notice any spelling errors below this is because I share the exact way it was typed into a search engine query to land on my blog.

  • Can I sell my clothes to Goodwill?– You can try but I’m 110% certain you’ll fail
  • Should you sell your house for the MPAC value?- Um, no.
  • How to cash my dead mothers GST cheques?- Are you really supposed to be doing that?
  • Eye Yam Stew Peed Jokes– WOW
  • Is $12.78 too much for one person’s groceries?- That’s precise.
  • What can I spend my Child Tax Credit on?– You child comes to mind.

That’s all the fun for this week, thanks for dropping by and we’ll see ya all again next Saturday!


Subscribe to the blog by entering your email address on the home page of the blog. Once you’ve subscribed you MUST activate your subscription via the email sent to you from Canadian Budget Binder. Open that email and click YES Subscribe me.

Don’t forget to Follow me on Social Media!

Image courtesy of digitalart at





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  1. I like the quote of the week. It’s really fulfilling when you have a purpose to live, though I know most of us take for granted this but I myself value this as it helps me be motivated to pursue my financial goals and monitor my progress.

  2. We went small with our first house but it still a brand new house that was at the top of our budget! We were newly out of college and did not qualify for much. The first few years were tight, tight, tight! I would not want to do that again. Our budget was so tight that we could not even afford a can of paint to cover up the builder beige walls. When our taxes were raised from $1500 to $1700, I was not sure where we would get the extra $200. We did muddle through and began to breathe easier as our wages rose. We were lucky it worked out, but I did spend many a sleepless night worried about money. If I had to do it over again I would have been more patient, saved more money and had an emergency fund to fall back on.
    When we bought our second house it was with a new set of eyes and some experience. We decided we would not buy as much as the bank told us we “qualified” for. We made sure that we would be able to buy a house with one income (in case of lay-offs, illness or whatever). We ended up buying a house that was soundly built, but needed cleaning and cosmetic updating. We got a bigger, older home in a better neighbourhood with a mortgage only $4,000 more than our first house. We had 25% to put down too (no CMHC fees). Over the last 15 years we have gradually been fixing the house up. We sleep easy at night because we didn’t over-extend ourselves.

  3. That bunk bed will look awesome when Nicola is done cleaning it up and such a great deal!!! Your recipe looks like my butter tart squares but with the pecans!!
    Have a great weekend!!

  4. It’s great to see your perspective- and the answer is always “it depends.” It’s also good to think outside the box. Do you really want a house? What about a condo, mobile home, etc. What about renting? Housesitting long-term? Being a live-in caretaker? Living with family? Moving abroad? Making an RV your full-time mobile residence?
    Some of my friends lived in college dorms for a few years after graduation when they were employed there as advisors. There are tons of non-traditional options that make the question more fun, even if the final answer is to still buy a traditional house.

  5. Back in 1982 we built our house, mortgage free, and then took personal loan for 21K to finish off the interior at 21% interest rates.Being in our early-mid twenties we were naive…never thought twice about it.
    Within 3 years we owned our house, and then sold it.. Took that money and took out a 45K mortgage (25 yr amort) on a larger house (have 3 babies by then). When the first mortgage statement came 12 months later, and it showed we had only paid $250 on the principle, I was horrified. I forget the interest rate, but I believe it was around 9-10 %.
    This was when we got serious about debt repayment. When the mortgage came up for renewal, we opted for the 6 month Closed, which was 5.75% (which was unheard off). …..Our house was paid off again within 6 years.
    Now we own several rental properties (thanks to remortgaging the house and using that money for down payments on other properties). ….we are 9 yrs away from owing that house again. With the low low interest rates (which I never thought in my lifetime I would ever see) I also hear some people say “Why would I pay off my mortgage, when I can invest elsewhere?”…..well, these rates won’t always be this low, and when they increase, many people may lose their homes, like it happened in 1980’s, when they went up to 18-21 %. They won’t be taking away my paid off homes.

  6. Good deal there Nicola. Many people, including my family is looking to go the way of tiny houses for the exact reasons that you mentioned in the blog. At the moment, the by-laws don’t allow for tiny houses but we are going to try convince our local government to consider changing the by-laws. Wish us luck!

    1. We don’t want a big house although we’d rather have a bigger property in the back if anything. Too big of a house means expensive bills and we’re just not a big enough family to justify it, yet.

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