THE TRUE COST OF DOWNSIZING

Downsizing can sound appealing — sell a larger home at today’s high values and buy something smaller with money left over. But while the concept seems simple, the financial reality is more complicated than most homeowners expect.

See why downsizing isn’t always the clear financial win people assume it to be. 👇

Before making a major move, it’s crucial to understand the full financial picture — both the costs of selling and the costs of buying your next home.

1️⃣ Why People Downsize

There are many practical reasons Canadians consider downsizing.

✔️ less upkeep and maintenance

✔️ moving closer to family

✔️ seasonal living in warmer climates

✔️ unlocking equity to help fund retirement

Downsizing can simplify life — but cost awareness is essential before deciding.

2️⃣ The Costs of Selling Your Home

Selling a home comes with more expenses than most expect.

✔️ realtor commissions (often around 5%)

✔️ legal fees and closing costs

✔️ repairs, upgrades, and staging

✔️ cleaning, storage, and decluttering

These costs reduce your net proceeds and should be factored in early.

3️⃣ The Costs of Buying Your Next Home

Purchasing a smaller home or condo also includes significant expenses.

✔️ land transfer tax (plus municipal tax in some cities)

✔️ legal fees and title insurance

✔️ moving costs

✔️ property tax adjustments

✔️ condo fees and annual maintenance

✔️ new furniture for smaller spaces

These costs add up and can impact the equity you keep after the move.

4️⃣ The First-Year Financial Impact

Even with a large sale price, downsizing doesn’t automatically mean a large windfall.

✔️ buying and selling fees reduce net profit

✔️ condo fees increase annual expenses

✔️ new furniture and moving costs add up

Understanding this breakdown helps determine whether downsizing truly achieves your financial goals.

5️⃣ Alternatives to Downsizing

If your primary goal is freeing up cash for retirement, other options may be better.

✔️ a reverse mortgage allows you to stay in your home

✔️ funds can be accessed tax-free

✔️ no monthly payments required

✔️ preserves stability and avoids selling costs

This option can keep you in your current home while still accessing needed equity.

💬 Final Thought

Downsizing can be a smart move — but only when the full financial picture aligns with your long-term goals. Selling, buying, moving, and adjusting to condo expenses all impact how much equity you keep, and the numbers don’t always work the way people expect.

If you’d like us to calculate the true financial impact of downsizing — or explore alternatives like a reverse mortgage — send The Frontline Mortgage Group a message anytime.