How Buying Your Second Home is Different Than Your First

07.8.22 | Buying

When the time comes to buy your second home, you may be surprised at how different the process can be compared to the first time. In addition to finding a new place to call home, you will also have to think about selling your current property too. 

While there are a few more moving parts that come with buying your second home, you’ll be able to use some of these new factors to your advantage. Here’s what you need to know about your second time in the market.  

New Market Conditions

Real estate is always changing. Regardless of when you bought your first home, you’ll be entering an entirely new market this time around. For instance, if you bought your home between 2015 and 2021, you likely encountered a very competitive buying landscape. Today, Toronto’s housing market is more balanced, and you’ll have new advantages like greater inventory to select from. 

You should also consider how the current market will impact the sale of your existing home. While each home is unique, if you’re expecting a fast sale far beyond the asking price, you may need to tailor your expectations somewhat. Your real estate agent can offer you an estimation of how your current home will perform in today’s market and how you can optimize it for a successful sale. 

Interest rates are back on the rise in Canada. Find out how this may impact you as a home buyer here

Existing Equity

When buying your first home, one of the biggest hurdles you’ll face is saving up for a down payment. Saving up extra cash and tapping into lines of credit until you meet the minimum amount can take years. Thankfully, things are a little bit easier the second time around. 

Not only will you now have existing equity in your current home that you can utilize, but you may even earn a profit on your new home if it’s gone up in value. This could mean you’re able to put a higher down payment on your new place, allowing you to potentially bypass costly mortgage insurance. 


No two real estate agents are the same. Check out these blog posts to learn more about finding the best agent for you.  


New Mortgage Options

Obtaining a mortgage can be one of the most stressful parts of the first-time home buying process. Now, unless your mortgage has been completely paid off, you’ll need to decide what to do with it. While some mortgages are portable, most homeowners opt to break their mortgage and re-apply for a new one with a similar rate and term. Breaking a mortgage typically comes with financial penalties, however, it can still be the more affordable option depending on circumstances. 

That being said, each buyer is unique and you should work with an expert to determine the best route for you. Both your financial advisor and real estate agent can offer helpful advice about the mortgage process. 


Concerned about the ROI of selling in today’s market? Check out these resources from our blog.


Selling Costs

When you bought your first home, there weren’t many additional fees and costs outside of the mortgage and home itself. Now, as you sell your current place, there are some additional costs to anticipate.  

As a buyer of your current home, you weren’t responsible for paying agent fees or commissions. As a seller, this is something you’ll need to account for as it may impact your budget. Don’t forget, you’ll still be required to cover the relevant land transfer tax as the buyer on your new home too. 

Another common cost of the selling process is staging. Although this is an upfront cost, staging generally offers a strong ROI, and can actually help you maximize the profits of your home sale. Finally, ensure you budget for the legal fees that will come with your home sale. 

Buying your second home can feel overwhelming, but it doesn’t need to. As experienced local agents, we’re here to help. Contact us