Choosing the right neighbourhood and protecting your home equity

You can renovate a house, but you cannot move it. The neighbourhood shapes your daily life and, over time, what your home is worth. Equity, the part of the home you own, grows through your payments and your choices.

The short version: decide what you cannot compromise on, check the neighbourhood in person and with data, and protect your equity by maintaining the home and managing debt.

Start with your priorities

Decide what you cannot compromise on, such as commute, schools, quiet, green space or walkability. Rank them, since no neighbourhood has everything.

What to check

• Commute: test it at rush hour, by the way you will travel.
• Planned changes: look up transit and road projects, and what can be built nearby, with your municipality's zoning and planning maps.
• Schools: confirm school boundaries with the school board, not only a listing.
• Daily needs: groceries, parks, health care and daycare within walking or short driving distance.
• Safety: neighbourhood crime data where police publish it.
• Flood risk: check with your municipality or conservation authority.
• Property tax: compare between municipalities, since it affects your budget.
• Time of day: visit on a weekday morning, an evening and a weekend.

Look at the market

Look at sold prices, not asking prices, and how long homes take to sell. Check whether prices in the area have grown steadily or in sharp swings. Our guide on home prices explains the measures.

How equity grows

Equity is your home's value minus what you owe. It grows in three ways:

• As you pay down the mortgage.
• As your area's prices change.
• As you maintain or improve the home.

Example

A home worth $600,000 with a $400,000 mortgage has about $200,000 in equity. Paying down $13,000 a year and keeping the house in good shape both add to it. If the value rises 3%, equity grows by another $18,000.

Ways to protect equity

• Budget about 1% of the home's value a year for maintenance.
• Keep the roof, foundation, heating, plumbing and electrical in good shape.
• Renovate wisely and avoid over-improving for the street.
• Use prepayment privileges when you can.
• Be careful with borrowing against your home.
• Shop around at renewal and keep insurance current.

Track it

Check your estimated value once or twice a year, and subtract your mortgage balance for a rough idea of your equity. Our Property Calculator gives a quick reference value.

Home values can fall as well as rise.