How to Save a Down Payment
Saving for a down payment on your first home can feel like a big hill to
climb, but with the right strategies and a little discipline, it’s more
achievable than you think. Whether you're dreaming of a cozy condo or a family
home with a backyard, every dollar you save brings you one step closer. And
with Saven Financial’s high-interest savings options, including the
First Home Savings Account (FHSA)
, your money can grow faster while you stay focused on your goal.
Key Takeaways
-
Creating and sticking to a budget helps you stay in control and prioritize
saving for your down payment.
-
Paying off debt first frees up more money and improves your chances of
qualifying for a mortgage.
-
Sharing your living space or relocating to a more affordable area can
significantly increase your monthly savings.
-
Cutting back on non-essential spending and selling unused items can help
you reach your savings goal faster.
-
Using Saven Financial’s high-interest
FHSAs ,
GICs, and
RRSPs
can help your savings grow more efficiently.
What Is a Mortgage?
A mortgage is a loan you borrow from a bank, credit union such as
FirstOntario Credit Union
, or private lender to finance the purchase of a home. The home itself secures
the loan. As the borrower, you agree to repay the loan principal plus interest
over a set term and amortization period up to 30 years in Canada. Terms
typically last between three and five years, after which you may renew or
refinance. Understanding your mortgage helps you plan your down payment and
long-term financial goals.
Minimum Down Payment in Canada
The minimum
down payment requirement
depends on the home’s purchase price:
- $500,000 or less: 5%
-
$500,001 to $999,999: 5% on the first $500,000 + 10% on the remainder
- $1.5 million or more: 20%
Example:
- For a $750,000 home, you’ll need:
- $25,000 (5% of $500,000)
- $25,000 (10% of $250,000)
- Total: $50,000
Homes under $1.5 million with less than 20% down require mortgage default
insurance.
Smart Strategies to Save Faster
Pay Off Debt First
Debt payments can eat up over 10% of your income. Paying off credit cards,
student loans, or car payments first frees up cash for your down payment and
improves your mortgage eligibility.
Get a Roommate or Relocate
Sharing rent or moving to a more affordable area can save you thousands
annually. Splitting a $1,200 rent could save you over $6,000 a year, money you
can put directly into your down payment fund
Cut Unnecessary Spending
Small lifestyle changes like cooking at home, canceling unused subscriptions,
or choosing “staycations” can free up hundreds each month. These savings add
up quickly when directed toward your homeownership goal.
Sell Stuff You Don’t Use
Declutter and cash in by selling unused items on platforms like Facebook
Marketplace or Kijiji. It’s a simple way to boost your savings with minimal
effort.
Grow Your Down Payment with Saven Financial
Saven Financial offers tools to help you save smarter:
-
First Home Savings Account (FHSA)
Contribute up to $8,000 per year (lifetime max $40,000), enjoy tax
deductions, and withdraw tax-free for your first home.
-
RRSP Home Buyers’ Plan
Withdraw up to $60,000 from your RRSP tax-free. You must repay it over 15
years.
-
TFSA GIC A
flexible, tax-free way to grow your savings if you’ve maxed out your FHSA
and RRSP.
Ready to Start Your Homeownership Journey?
Buying a home might feel overwhelming, but with consistent saving, smart
budgeting, and the right financial tools, you can make your dream a reality.
Visit SavenFinancial.ca to open
your FHSA or
GIC
and start your journey to homeownership today.