Often, but not automatically — and the honest answer is that it depends on numbers specific to your house, not on an average.
You will find plenty of pages claiming downsizers typically free up some specific range, or save some specific amount monthly. We used to carry figures like that and removed them, because we could not stand behind them.
The amount you would free up depends on what your home is worth, what you owe, what you buy next, and what it costs to run. Any of those changing by ten percent moves the answer by more than the ranges those articles quote. An average is not an answer to your question.
What we can give you is the method.
Step one — what actually comes out of the sale. Sale price, minus the mortgage payout and any penalty, minus commission and GST on it, minus legal fees and adjustments. That is your net proceeds, and it is usually less than people assume. Net proceeds calculator →
Step two — what the next place costs in full. Purchase price, plus legal, plus Land Titles registration, plus moving, plus whatever you will spend making it yours in the first year. That last one is routinely underestimated.
Step three — the difference between running costs, not just prices. This is where downsizing either works or does not:
Condo fees look alarming to someone who has never paid one. The fair comparison is not "fee versus no fee" — it is the fee against what you currently spend on the things it replaces.
Against a condo fee, set your snow removal, lawn care, exterior maintenance, roof and window replacement reserves, water and sometimes heat where included, and building insurance. Many downsizers find the gap much smaller than expected, and some find it favourable once the roof they were going to need in four years is someone else's problem.
What matters more than the fee is whether the reserve fund is healthy, because an underfunded building can produce a special assessment that dwarfs the fee difference. Reserve fund studies →
Where a home has been your principal residence throughout, the gain may qualify for the Principal Residence Exemption. Whether it applies fully to your situation depends on facts we are not qualified to assess — that is a conversation with your accountant, and worth having before you sell rather than after.
Sit down with the actual numbers for your actual house before deciding. It takes an hour, and it is the difference between a decision and a hope.