Mortgage Before Marriage: Why Millennials Are Prioritizing First Time Home Ownership Over Weddings


Why spend $32,000 on a wedding when you could invest that money in your financial security instead? For an increasing number of millennials, the decision to become first-time homebuyers first, and married couples second, is by far the better strategy.

The trend is entwined with another big social shift: the growing proportion of couples choosing common-law partnerships over legal marriage. According to Statistics Canada census data, by 2011, common-law couples/families comprised 16.7% of families in Canada, a growth of 13.9% since 2006.

While there’s no official data on how many of those couples own rather than rent, Genworth Canada’s 2015 First-Time Homeownership Study found that 25% of couples buying a first home together were unmarried.

Reasons for putting homeownership first

Although various factors contribute to the growing number of millennials choosing to prioritize buying their first home together over getting married, key drivers likely include the following:

1. Historically low interest rates

With extremely low interest rates, the smart money is on locking in a great mortgage now and building equity, rather than paying rent over the long term.

2. Less fear of “living in sin”

Studies show that while millennials are just as spiritual as previous generations, they are less conventionally religious. They’re also more socially and politically liberal than previous generations. Upshot: They’re the generation least likely to frown upon living together before marriage. And if renting together goes well, many consider the next step to be buying together.

3. Financial priorities

Compared with Gen Xers, baby boomers and the Greatest Generation, millennials have had a tougher time finding their financial footing. Today’s knowledge-based, creative economy has required more education than ever before, and millennials are more likely to graduate not just with student loan debt, but with a higher average debt load than any previous generation.

As if that weren’t enough, a large portion of this age group then entered the job market during the recession of 2007-09.

As a result, millennials are masters at prioritizing between needs and wants. For many, the security offered by homeownership is far more important than a wedding. That average wedding cost of $32K (and the typical engagement ring cost of $4,000)? Savvy millennials know that could go toward a solid down payment instead.

How to get started

If you’re a millennial – married or not – now’s a good time to begin your journey toward homeownership.

Low interest rates make it possible to comfortably afford the mortgage on a starter home, particularly if you’re excited at the prospect of blazing new trails in an up-and-coming community.

Key considerations for unmarried partners

Buying a home together? Both you and your partner should protect your interests with these two key steps (even before you start house hunting).

Draft a cohabitation agreement

If a married couple split up, their assets are automatically divided 50-50. But if you’re not legally married, that might not be the case. A cohabitation agreement specifies who’s responsible for what, and who gets what (or what percentage) in the event of a breakup. It covers your shared home, as well as furniture, joint debt and spousal support.

Don’t move in together – let alone buy property together – without one!

Get a lawyer

Don’t download a quickie cohabitation agreement off the internet. Make an appointment with a family lawyer, who is experienced with the common-law marriage conventions of your province. Your family lawyer will draft a fair agreement and answer any questions.

You and your partner should consider hiring separate lawyers. In the absence of independent legal advice for each partner, the cohabitation agreement may not stand up in court, should it be disputed after a breakup.