Moving Up in Kelowna: Does the Price Gap Matter More Than Your Sale Price?
If you are selling one home to buy a more expensive one, the price gap can matter more than your sale price alone. Getting less for your current home could still leave you needing less money to move up if the next home has fallen further in dollars. But the benefit depends on both properties, your mortgage and the full cost of moving.
Imagine your home is starting to feel too small.
You need another bedroom, somewhere to work with the door closed, or a layout that works better for daily life. You have been looking at homes in Kelowna, but you keep coming back to the same thought:
“I don’t want to sell mine for less than it was worth.”
I understand that. It is hard to let go of a number you once thought your home could sell for.
Before putting the move on hold, I would look at the price of the home you want next. If that has changed too, the whole move may look different.
What is the price gap when moving up?
The price gap is the purchase price of your next home minus the sale price of your current home.
If you sell for $800,000 and buy for $1,100,000, the gap is $300,000 before transaction costs.
That is not necessarily your new mortgage. Your existing debt, savings, selling costs and purchase costs still need to be included.
But it is a useful starting point because it shows how much more expensive the next property is than the one you own.
When selling for less can still help
Consider this made-up comparison:
Item | Earlier hypothetical values | Later hypothetical values |
|---|---|---|
Current home | $900,000 | $810,000 |
Home you want to buy | $1,300,000 | $1,170,000 |
Price gap before costs | $400,000 | $360,000 |
Both properties are 10% lower in the second scenario.
Your current home is worth $90,000 less. That is the part that can feel uncomfortable.
The next home, though, costs $130,000 less. The gap has narrowed by $40,000.
You would receive less for your sale, but the extra amount needed to buy the next home would also be smaller.
These figures are illustrations, not actual Kelowna sales, valuations or a claim about current price changes. They also exclude transaction costs, financing changes and the cost of waiting between the two scenarios.
The example shows why judging a move only by your sale price can miss something useful.
When a lower market does not help
The two homes may not move together.
Suppose you are selling an apartment and buying a detached home. Or selling a property that needs work and buying one with a layout, location and condition that buyers are competing for.
There is no reason to assume their prices will change by the same amount or percentage.
Here are three possible outcomes, using the same starting values:
Illustrative scenario | Current home | Next home | Price gap |
|---|---|---|---|
Starting comparison | $900,000 | $1,300,000 | $400,000 |
Both fall 10% | $810,000 | $1,170,000 | $360,000 |
Current home falls 10%; next home falls 5% | $810,000 | $1,235,000 | $425,000 |
Current home falls 5%; next home falls 10% | $855,000 | $1,170,000 | $315,000 |
In the third row, both homes cost less, but moving up requires $25,000 more before costs than the starting comparison.
In the fourth row, the gap is $85,000 smaller.
That is why I would compare the homes you could realistically sell and buy. A Central Okanagan average cannot tell you how those two parts of your move fit together.
A smaller gap does not guarantee an affordable payment
The next step is to turn the price gap into a borrowing estimate.
Using the $810,000 sale and $1,170,000 purchase above, suppose you have a $350,000 mortgage and allow $60,000 for all selling, buying and moving costs.
Calculation | Illustrative amount |
|---|---|
Sale price | $810,000 |
Less existing mortgage payout | −$350,000 |
Less assumed total transaction and moving costs | −$60,000 |
Equity available toward the purchase | $400,000 |
Next home purchase price | $1,170,000 |
New mortgage needed, with no extra savings contributed | $770,000 |
The $60,000 allowance is invented for this example, not a fee quote. Actual costs need to be calculated for your transaction, with enough cash available when deposits and closing expenses are due.
The gap has narrowed, but you would still be moving from a $350,000 mortgage to a $770,000 mortgage under these assumptions.
Whether that works depends on the payment, your income, other debts and the room left in your budget. A different interest rate or repayment period can change the monthly result.
The Financial Consumer Agency of Canada explains that some mortgages can be transferred to another home, subject to lender restrictions. Paying out a mortgage early can also trigger a prepayment penalty. Ask your lender to confirm your options and costs before relying on your existing rate for the move.
Compare the cost of living there, too
The purchase price is only the start.
A larger home may bring higher heating and cooling costs, insurance, property taxes or maintenance. A pool, larger yard or older roof can add responsibilities that were not part of your current budget.
The next home might also reduce some costs. A better location could shorten your drive. A different layout could remove the need for a renovation you were considering.
I would compare the likely monthly costs alongside a separate allowance for repairs. Then ask whether the extra space or better layout is worth that ongoing commitment.
The goal is a move you can comfortably live with after possession day.
Selling first or buying first changes the risk
Even a sensible price gap can become difficult if the timing does not work.
Selling first gives you more certainty about your sale proceeds. The trade-off is finding a suitable replacement within your timeline, or arranging somewhere to stay.
Buying first gives you certainty about the next home. The trade-off is uncertainty about what your current home will sell for and how long it will take. Your financing needs to account for that risk.
Before choosing an order, I would test what happens if your sale takes longer or brings less than expected. Any plan that depends on a quick sale at the highest estimate needs more room.
Three numbers to work out before waiting for a recovery
If you are thinking about moving up in Kelowna, start with:
- A realistic sale range for your current home. Use comparable completed sales and account for condition.
- A realistic purchase range for homes you would choose. Asking prices alone do not establish what a seller will accept.
- The total cash and monthly payment needed to complete the move. Include transaction costs, financing and ongoing ownership expenses.
Then test a less comfortable outcome: a lower sale, a higher purchase, or a delay between the two.
Waiting may make sense if the payment would stretch you, the right replacement is not available, or your current home still works well.
But if the move fits your budget and solves a real need, a lower sale price by itself may not be a good reason to rule it out.
If you are considering moving up in Kelowna, contact me to compare your likely sale range with the homes you would actually buy. We can work out the price gap before you decide whether a move is worth pursuing.
Mark Coons, BBA, CE
Mark Coons Personal Real Estate Corporation
REALTOR® | eXp Realty Kelowna
Team Lead, Selling Okanagan Group
Relocated to Kelowna in 2018
778-946-6454 | [email protected]
