Saving for a mortgage down payment requires discipline and planning. For many people, saving for the down payment can be the hardest part of home ownership. Here are seven steps to help you save for a down payment:
Determine the amount you need to save: The minimum down payment in Canada is 5% of the home’s purchase price, but you may need to save more to avoid extra fees like mortgage default insurance. Calculate the amount you need to save based on the home’s price and any other fees.
Create a budget: Review your income and expenses to see where you can cut back to save more. Consider cutting back on non-essential expenses like dining out or entertainment, and look for ways to reduce your monthly bills.
Open a dedicated savings account: Open a separate savings account specifically for your down payment savings. This will help you track your progress and prevent you from dipping into the funds for other expenses.
Automate your savings: Set up automatic transfers from your checking account to your savings account on a regular basis, such as every pay cheque. This ensures that you are consistently putting money aside for your down payment.
Look for ways to increase your income: Consider taking on a side hustle or part-time job to increase your income and accelerate your savings.
Consider the Home Buyers’ Plan (HBP): If you are a first-time homebuyer, you can withdraw up to $35,000 from your RRSPs tax-free to put towards your down payment through the HBP. Keep in mind that you must repay the amount withdrawn within 15 years. (Learn more about HBP)
Stay committed to your goal: Saving for a down payment can take time and require sacrifices, but staying committed to your goal will help you achieve homeownership sooner.
Remember that every little bit helps! Start saving as soon as possible and stay disciplined with your budget and savings plan. It will be worth it in the end!
Thinking about buying real estate? Check out our up-to-date listings HERE. Or contact Jamie HERE
Related Links:
Buying Real Estate In 7 Easy Steps
