The golden number for any home purchase typically starts with the 20% down payment, which means you'll likely be looking to save around +$80K for an average home in Canada and +$130K for homes in cities like Toronto and Vancouver. While some options are available for you to put less, a lower % down payment will typically have higher mortgage payments in the future and require mortgage loan insurance. Saving for the down payment really boils down to a combination of approaches:
No, cutting back on the occasional coffee and avocado toast will not magically make home ownership more affordable, however taking stock of what you are spending on at a high level will. Figuring out what your largest monthly expenses are will go a long way in identifying how much cash you actually have at the end of the month after fixed and recurring expenses. Depending on your context, this might include.
As counter-intuitive as it might sound, taking a critical view of how you’re making money will likely have way more of an impact on your ability to save than managing your expenses. Typically, your salary will be your biggest income, but figuring out other ways to grow it further will help ease the burden of saving in the long run. Depending on your career, start mapping out what’s the typical career progression in your industry to get a sense what you should aim for (as well as the potential salary implications down the line!)
Alternatively, finding ways for your savings to make you money can be a great way of compounding your savings potential, either through a combination of investments in stocks, ETFs, GICs, and other financial products.
Becoming a first time home owner isn’t easy and fortunately the government has created some policies to help you get there faster. Top of mind, these programs typically include:
Regardless of how you approach it, saving for a down payment takes a long time and requires you to consistently and methodically put aside your savings into financial products that actually work for you (read: not your big bank savings account). Finding ways to save effectively combined with a focus on growing how much money is coming will undoubtedly help you get on the path to home ownership.
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