Ways to save for your down payment faster
Coming up with the twenty percent needed for a down payment can seem like a daunting task, but it doesn’t have to be if you have a good game plan. Every small amount you save now will move you toward your goal. And while options for a lesser down payment may seem tempting (and may even make sense), the size of down payment you can afford now can have a long-term impact on your finances, determining your monthly mortgage payments and your initial home equity.
The first step in saving is to determine how much you will need. Review your budget, evaluate your income and expenses, and determine how much house you can afford. Try to deposit an amount similar to your mortgage payment into a savings account every month. Another option is to deposit the cost of your property taxes so you get comfortable adding that to your monthly costs. Visit Financial Tools and Calculators to learn more.
Commit to saving first by automating. It’s easy to set up a pre-authorized debit from your chequing to a high rates savings account, whether you do this on your own through online banking or call our Member Contact Centre to help you get started. And, instead of transferring to a regular savings account, consider moving money into a TFSA, which will give a higher rate of return on your investment, boost your savings, and shelter your savings from taxes.
As you work toward your saving goal, consider investing any “one-time” income that comes your way. Bonuses, tax refunds, gifts, and side-income earnings can substantially move you toward your goal. If you’re a first-time homebuyer, you can use your RRSP to top off your savings and increase your down payment. This will reduce your monthly payment and give you room in your budget to pay back your RRSP over time.
Finally, remember to celebrate! Saving toward a long-term goal like a house can be challenging. Finding moments to celebrate reaching important milestones can keep you on track.
Take the next step
When you’re ready to take the next step towards home ownership, call 1.800.728.6440 to schedule an appointment with an SCU lending specialist, or contact us by clicking the button below to fill out a contact form.