"We will be better off now than when we were renting," said Rick Johnson when he bought a house in Winnipeg, Manitoba, with partner Janice Miller. "We won't keep lining someone else's pocket. Now the money goes for us. The mortgage payments are going to be half what our rent was, including taxes."

With the prospect of lower interest rates ahead of us -- at least periodic dips in rates -- this may be a great time to take a serious look at what your "shelter cost" loonies would buy you in the housing market. Canadian real estate developers have been encouraged by government research to look on first-time buyers as a major driving force for the real estate market, and so there is a variety of housing available for entry-level buyers.

Realtors are happy to do the "rent or buy" number crunching, so don't shelve the idea just because you don't know where to start. Canadian online calculators are a great help, too.

Gross Debt Service (GDS) Ratio is one of the main formulas used by lenders to decide what size of mortgage you can afford. The GDS Ratio dictates that the total amount spent on property taxes, mortgage interest and principal should be less than about 30% of your total before-tax income.

Stay in control of this project yourself.

If you do get someone to help you, don't just take their word for the numbers crunched or their conclusions. Verify interest rates, property tax estimates, average heating costs, condominium fees and other factors necessary to gauge the feasibility of buying a home.

Our Winnipeg couple set very careful financial goals for themselves because they wanted this house to be an investment, too.

They originally planned to buy the house they were renting to save the cost of moving and to take advantage of improvements they had made.

Talking to a Realtor helped them realize that the owner was asking more than fair market value for the home. The couple felt they could do better elsewhere.

After searching for two months, they were discouraged by the condition of houses they could afford, but did not want to postpone their home buying plans any longer. The couple, who had originally moved to Winnipeg from northern Manitoba, was determined to buy in an established neighbourhood.

"The bigger houses in our price range needed a lot of work," said Johnson, a heavy equipment mechanic. "We looked at additions that were pulling away from the house and houses that needed new roofs. We decided to buy something basic and add on something new."

Canadians who set out to become homeowners without dramatically increasing their monthly housing costs can get swept up into the world of snazzy interiors, slick marketing campaigns and glib rationalizations. Months later, they may end up mortgaged to the hilt -- house rich and cash poor. Deciding to buy as much house or condominium as you can financially squeeze into is fine if you go into the situation with your eyes open and your financial backside covered. Ending up in this situation because you got carried away may also mean you have not made very sound decisions about the future value of your real estate.

The couple compromised on size but not on their investment. They bought a well-maintained two-bedroom bungalow, but chose the best neighbourhood they could afford.

The house, said Mr. Johnson, "is not that big, but we could add on a new addition and it would still be cheaper than what we looked at before.

"Owning is definitely better than paying on something you don't own."

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