In today’s day and age, saving for a down payment might sound about as easy as climbing Mount Everest. Sure, it’s no small task, but homeownership may also be a lot closer than you think. With the right planning, discipline, and a little bit of creativity, you can give your savings a boost and finally reach your goals of owning a home.

We’re real estate agents who love helping people find and buy their dream home, but we’re also homeowners ourselves. All that said, we know a thing or two about saving up for and buying the perfect property.

In this blog, we’ll share our best tips for how to save for a down payment on a house.

How Much is a Down Payment on a House?

Let’s start with the basics. After all, how can you save up for something if you don’t know how much it even costs? So, how little (or how much) do you need just to qualify as a buyer?

When it comes to the absolute minimum down payment that you can make on a house, there’s no universal or one-size-fits-all amount. Instead, the down payment required will be based on the price of the property being purchased.

In Ontario (and the rest of Canada), down payments follow a tiered structure. Here’s how it breaks down:

• If a house is under $500,000, the minimum down payment is 5% of the purchase price.
• If a house is priced between $500,000 and $1,499,999, the minimum down payment is 5% on the first $500,000, then 10% of the remaining purchase amount.
• If a house is priced over $1,499,999, the minimum down payment is 20%.

Create a Savings Plan

Saving up for a house is serious business. If you really want to reach your goals, you’ll need to have a little bit of structure in place. Let’s look at how you can do that.

First, you’ll want to determine how much money you can afford to set aside each month. Take a look at your income and compare it with essential expenses, like rent, groceries, utilities, or vehicle costs. Make note of how much money you have left over each month.

Buying a house in Ontario for the first time? Check out these blogs for real estate advice for buyers!

• Where to Find Affordable Homes in Ontario
• How to Maximize Your First Home by Moving Outside of Toronto
• Can I Hire a Toronto Realtor® in Durham Region?

Set Your Timeline

Next, think about when you would like to buy a house. Whether it’s in 5, 10, or 15 years, you’ll want to establish a rough timeline to add structure to your savings.

Let’s say you have a down payment goal of $75,000 and you want to buy a house in 10 years. That breaks down to $7500 a year, and $625 a month. Now you know exactly how much you’ll need to put aside if you want to buy on that timeline.

You can also do this calculation backwards. Let’s say you have $500 of disposable income left over each month. With diligent saving, that adds up to $6,000 a year and $60,000 in a decade’s time. Will that be enough for you?

Have Discipline

Once you’ve worked out your finances, it’s time to set specific goals – and stick to them! As a minimum, you should commit to moving a specific amount into your savings each month. This will require some budgeting (and maybe a few sacrifices), but it’s an essential step in saving up for a down payment.

Don’t Be Afraid to Accept Help

It’s no secret that young Canadians are facing different economic conditions compared to generations past. With that in mind, a lot of home buyers today get some sort of financial support from family members – usually parents.

Our professional advice is this: take the help if it’s offered to you. Of course, everyone has their own comfort levels and accepting help (especially when it comes to money) can be awkward or even just plain uncomfortable. However, it can be a difference maker in buying a home sooner rather than later.

We’ve got plenty more advice and tips for buying a house. Read these related blogs next!

• Steps to Buying a House: A First Timer’s Guide
• How to Make the Perfect Home Offer
• Buying a Fixer-Upper: How Much Work is Too Much?

Boost Your Savings

If you’re setting money aside to buy a house for the very first time, you’ll want to know about Canada’s First Home Savings Account – aka the FHSA.

The FHSA is a unique tax-deductible government savings account specifically designed to help you save up for a home faster (if you qualify). It has an annual contribution limit of $8,000 and a total limit of $40,000. Plus, you won’t be taxed for withdrawing your savings when it’s finally time to buy.

Take Your Buying Power to the Next Level

Finally, if you really want to maximize your home-buying power, you’ll want to work with a great real estate agent. That’s where we come in! At Puckrin & Latreille, our unmatched market insights are to your advantage.

Not only can we help you navigate the market and find a great place to call home, but we’ll also help you get the best deal possible when it comes to making an offer and negotiating the final sale price. That’s because we have more than 175 years of combined experience and have bought virtually every type of home in Durham Region and Kawartha Lakes.

Ready to buy a house? We’ll help you find a great match. Call 905-985-7300 or send an email to hello@liveplayinvest.com.

Book a Meeting

Whether buying or selling a home in Port Perry and the surrounding area, our team has you covered. Book a call with us today to get started.