Many people think that the main difference between a tiny house and a big house is just the size, and you would be forgiven for falling into that group of people. One of the major factors that people overlook when considering a tiny house vs. a large house is the financial factor. Not just the cost to build, but the overall long-term financial picture.

Consider this. As a homeowner, or a future homeowner, you are likely to have a mortgage. That mortgage, depending on the cost of the home could be anywhere from $1000 – $2000 per month, maybe even more. If you are one of these people, there is a good chance that a large portion of your income every month goes to the cost of having a place to live. On average, singles, couples, and families will spend up to 30% of their annual income just on their mortgage or rent alone.

The problem is that we rarely look at our financial housing situation in this way. If you are just trying to break into the housing market in Alberta, the average cost to purchase a home is $376,600. In British Columbia that number jumps to $728,500. In Saskatchewan it is $281,100. Regardless of where you are considering purchasing a home, just to get a mortgage in one of these provinces will typically require a 20% down payment, which means somewhere between $56,000 and $146,000 up front. So even on the low end, you are still looking at more than $50,000 just to get into the low side of the housing market.

Most people consider the monthly payment to just be a part of life, seamlessly woven and integrated into our society. We often fail to consider that this means we may not experience true financial freedom for many, many years. Think about that for a moment. What does financial freedom mean to you? Is it being debt free by 40? Is it having more money for leisure and less needed for necessity? No matter how you define it, the cold hard reality is that housing prices continue to rise at a rate that our wages and salaries simply do not. More and more people of all demographics are being priced out of the market, with the dream of OWNING a home remaining as exactly that, a dream.

Perhaps it is time to consider a different option. Thinking about what you truly NEED in your life, if those things can fit into a tiny house, maybe it is time to consider it as an option.

The cost to purchase or build a tiny house in Western Canada can range anywhere from $20,000 to $150,000, depending on the build. So, let’s average that to roughly $85,000. If you can build a brand new tiny house for $85,000 (which you definitely can), even if you have to take out a loan to make it happen, you are likely looking at a down payment between 10% and 20%, which means on the high side you are looking at $17,000. That is much MUCH less than the down payment required on a mortgage.

The housing problem is not going away. In fact, it seems to be getting worse and worse year over year. If the current housing market is slowly making the road to financial freedom impossible for many people, then it is time to consider other options for affordable housing. Tiny houses are here to stay, and perhaps making the decision to get into one will be your ticket to true financial freedom in the future.