Downsizing Your Home: When and How to Do It

Maybe the kids have moved out, the stairs have become a chore, or you'd simply rather spend your money on living than on a house that's bigger than you need. Whatever the reason, downsizing can free up equity, slash your monthly costs, and simplify your life. Here's when and how to downsize in Ontario — and how to put the equity you unlock to work.

Key takeaways

• Downsizing can release a large chunk of home equity and meaningfully lower your monthly costs.
• Smaller homes still carry land transfer tax and closing costs, so the move isn't free.
• Coordinate your sale and purchase so you're not paying two mortgages or scrambling for housing.
• Decluttering early makes both the sale and the move far smoother.
• HOMEH coordinates your move and gives eligible buyers the industry's highest Cashback Rebate. Sellers list for 1%, or free when they also buy with HOMEH within 6 months, or $395 + HST with a Mere Posting.

Why people downsize

Downsizing isn't only for retirees. Empty nesters, anyone tired of maintaining a large property, and people who'd rather free up cash for travel, family or investments all choose a smaller home. The common thread is the same: less space, lower costs, and often a healthy chunk of equity released in the process.

Downsizing is partly financial, partly lifestyle

The numbers matter, but so does how you want to live. A smaller, simpler home can mean more time and money for everything else — weigh both sides before you decide.

The equity you can unlock

The financial heart of downsizing is the equity difference: what your current home sells for, minus what your smaller home costs and the expenses of moving. That gap can be substantial, and it can go toward retirement, paying off debt, helping family, or simply a more comfortable cushion.

But the move isn't cost-free. You'll still pay closing costs on the home you buy — including land transfer tax — plus selling costs on the home you leave. Estimate the buy side with the closing cost calculator and the sell side with the selling cost calculator so the net equity figure is real.

Mind the commission on the sale

Traditional selling commission of around 5% plus HST can take a big bite out of the equity you're trying to free up. A lower listing fee keeps more of that equity in your pocket — exactly where downsizing is meant to put it.

Timing your move

Like any move-up or move-down, downsizing means selling one home and buying another — so timing the two closings is the central challenge. Selling first gives you certainty on how much equity you have to spend; buying first secures the smaller home you want before settling your sale.

Read should you buy or sell first? to choose your order, and buying and selling at the same time for handling overlapping closings. If the dates don't line up, bridge financing can cover a short gap, and if you still have a mortgage you might be able to port it to the new home.

Making the move easier

Moving to a smaller space takes more planning than moving to a bigger one — there's simply less room. A little preparation goes a long way.

1. Declutter early. Start months ahead. A lighter home shows better and is far cheaper to move.
2. Measure before you buy. Make sure your must-keep furniture actually fits the new space.
3. Plan storage realistically. Smaller homes have less of it — be honest about what you'll keep.
4. Sell or donate the rest. Turn excess into cash or a tax-friendly donation rather than moving it.
5. Stage what's left. A decluttered home sells faster — see home staging tips that sell.

Downsize with HOMEH

The whole point of downsizing is to keep more of your money — so the fees you pay to move matter enormously. HOMEH coordinates the sale of your current home and the purchase of your smaller one, lists for a low fee, and shares commission back, so more of your hard-earned equity stays with you. Start with HOMEH's sell-and-buy service.

Downsize with HOMEH and get cashback

Eligible HOMEH buyers receive the industry's highest Cashback Rebate — added straight to the equity you're freeing up. Sellers list for 1%, or free when they also buy with HOMEH within 6 months, or $395 + HST with a Mere Posting. Estimate yours with the cashback calculator.