Tips for Saving for a Down Payment

It’s becoming increasingly difficult for young, first-time homebuyers in Guelph to buy their first home. One reason for this is that many people are unable to save up the money that’s needed for a down payment.

At HomeLife Power Realty Inc., we’re proud to help homeowners live their dreams of owning their own home. If you’re trying to save for a mortgage down payment, here are a couple of helpful tips.

Tap into your RRSPs

Have you been contributing to an RRSP for the last few years? Depending how much you have invested, you may be able to tap into your savings for a down payment. Canada’s Home Buyer’s Plan lets you withdraw up to $25,000 from your RRSP one time, as long as you pay it back again within 15 years. If you think you can discipline yourself to pay this loan back, this might be a good option for you.

Buy a home that requires renovations

Many people dream of buying a brand new, ready-to-move-in home with little or no work involved. But if you’re struggling with saving enough money for your down payment, it may be worthwhile to consider buying a fixer upper of sorts. This will not only be friendlier to your budget, but it could also qualify you for a Purchase Plus Improvements mortgage. This type of mortgage gives you the freedom to make home improvements that are rolled into your mortgage.

Think about where you can start cutting costs

From your phone bill to your cable subscription and beyond, there may be a lot of ways that you can cut down on your monthly expenses. You don’t have to cut out everything, but making adjustments here and there can help you save money, which you can then put towards your down payment. Make a list of services that you could live without, and cut those first. Then, start shopping around for better rates on services that you can’t live without. Some service providers (phone, cable, insurance, etc.) may give you a discount if you leave their competitor.

Consider adjusting your timeline

Sometimes, people just don’t give themselves enough time to save for their down payment - especially if they don’t know just how much they have to save. It’s easier to save up money over a longer period of time, so if you’re thinking about buying a house in the next year, consider waiting another year or two to give yourself more time to save. It also makes it easier to maintain your current lifestyle without making cuts or sacrifices to those little extras.

Are you aware of recent changes to mortgage rates and rules in Canada? Find out more on our blog.