First-time buyers in Alberta expect to spend $406,000 on a home, the highest average in the country, according to a report released Tuesday by BMO.

The First-Time Home Buyer’s report said the average amount Canadians planning to buy their first home in the next five years plan to spend is approximately $300,000, with an average down payment amount of $48,000 (16 per cent).

First-time buyers in B.C. expect to spend on average $384,000 and it was $326,000 in Ontario.

The report also found: on average, first-time home buyers expect to be mortgage free in 20 years, with 20 per cent estimating it will take between 10-19 years; those planning to enter the real estate market for the first time are twice as likely to choose a fixed rate over a variable rate mortgage (46 per cent versus 20 per cent); and first-timers who expect interest rates to stay the same or decrease over the next five years still prefer fixed rate over variable rate mortgages (39 per cent versus 23 per cent).

“Buying a home is one of the most important financial decisions one can make. It’s crucial that those planning to enter the market are well prepared — not only to manage their costs, but also to pay off their mortgage as soon as possible,” said Laura Parsons, Mortgage Expert, BMO Bank of Montreal. “Determining what your mortgage payments and overall costs of home ownership will look like, and then living in that financial reality for a year before entering the market, can be an effective strategy.”

According to the report, two-thirds of first-time buyers (66 per cent) say the latest changes to mortgage regulations — which included reducing the maximum amortization for government-insured mortgages to 25 years from 30 years — have not affected their buying timeline, while 19 per cent say they will have to wait longer before buying as a result.

The report also found: 63 per cent of first-time buyers have made cutbacks to their lifestyle to save for their first home, with 27 per cent expecting their parents or other family members to help them pay for their first home; 59 per cent have had to hold off buying their first home because of increasing housing prices; and 59 per cent wish they had bought their first home five years ago.

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