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The size of our house made it affordable and sustainable. At just over 990 square feet, our entire lot, including the house, parking pad and garden, is less than half the 2000 square-foot average new house size in Canada. In our neighbourhood, in February, the average residential selling price exceeded $1,000,000 and the minimum lot size was over 3,000 square feet (based on data from MLS).

We were not in the market for a million-dollar home, but we could have spent considerably more than we did. We were therefore taken aback when our anomalously economical home was turned down by several mortgage lenders.

Unlike small condos, small houses are considered to have poor resale value and many lenders do not entertain properties under 500 square feet. We find this odd for several reasons. First, the sale of the house we’ve just bought generated multiple competitive bids, which pushed the sale price well beyond asking and belies poor resale value in the current market.

Second, only floor space at or above ground level counts for mortgage purposes. Although the house has a fully finished basement that currently incorporates a complete bedroom and (the property’s only) bathroom, these rooms do not count towards the square footage of the house. With them, we have more than 500 square feet, without them, less. The only explanation we’ve found for this is that basements “were never designed to be part of the house.” Perhaps not, but they can, like ours, be redesigned, refitted, and in some cases turned into not just part of the house, but all of it. In London, British architect Laura Clark lives completely underground in a spectacularly converted former public lavatory. It amuses us to imagine a Canadian banker telling this inventive individual that since such a space was most emphatically never intended to be lived in, she doesn’t in fact have a house at all.

Lastly, the banks seem to be ignoring a continuing trend towards smaller Canadian homes. This should, if anything, render them more, not less, attractive to future buyers than their larger counterparts.

A few recommendations

We finally got a mortgage with Scotiabank, who are not only capable of thinking small but also produce EcoLiving, an extensive online resource about lower-impact living.

We received considerable help throughout the buying process from our mortgage broker, Dave Larock, and we highly recommend his services, especially to other first-time buyers.

Our real estate agent, Carol Marquis, provided the still point of the dizzily turning world of Toronto real estate. She is reliable, knowledgeable and completely trustworthy; her 30-plus years’ experience in the Toronto market was instrumental in helping us successfully negotiate the unwelcome process of competitive bidding.

© 2014 Penelope Radley and Tiny House Toronto. All rights reserved.

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