Saving a down payment can be a challenge. But think of it this way: if you can discipline yourself to regularly set aside funds until you have a down payment, you’ll probably have no trouble making your mortgage payments.
Here’s how to get started:
- Set a goal. Research the housing market, the areas in which you would like to live, and decide what you can afford.
- Determine the required down payment. Set that amount as your goal.
- Open a savings account. This should be used specifically for your down payment. Most Canadian banks allow you to open savings accounts for free, and some of them even allow you to open them online.
- Keep a budget. Make sure it includes monthly payments to your down payment savings account, and eliminate unnecessary purchases.
- Live below your means. Eat at home more often, put off expensive vacations, and take public transit to work. Put the money saved from doing all these things towards your down payment. Little things can add up over the year, bringing you closer to your goal.
- Consider getting a part-time job. Deposit your earnings in your down payment savings account. Depending on the type of work you are willing to do and the time you have available, there are websites that regularly post part time opportunities such as Upwork, AskForTask and Fiverr.
- Direct all unexpected revenue to your down payment. This includes raises, bonuses, tax refunds and inheritances. It is always hard to do this, but you will thank yourself in the long run.
- Pay off debt. It’ll take extra funds at first, but over the long term, your interest savings can bump up your down payment significantly.
- Consider using your RRSP. First Time Home Buyers can take advantage of the RRSP Home Buyers’ Plan to help with their down payment.
- Set your sights a little lower. If saving is taking too long, consider a home in a lower price range. There could be something similar to what you need, but in a different neighbourhood with a lower price. Keep your options open.
Always remember, once you’re in the market and building equity in your home, you can always move up later on down the road.