Smart Strategies to Save for Your Down Payment
Dave Lacusta • October 22, 2025
How to Start Saving for a Down Payment (Without Overhauling Your Life)
Let’s face it—saving money isn’t always easy. Life is expensive, and setting aside extra cash takes discipline and a clear plan. Whether your goal is to buy your first home or make a move to something new, building up a down payment is one of the biggest financial hurdles.
The good news? You don’t have to do it alone—and it might be simpler than you think.
Step 1: Know Your Numbers
Before you can start saving, you need to know where you stand. That means getting clear on two things: how much money you bring in and how much of it is going out.
Figure out your monthly income.
Use your net (after-tax) income, not your gross. If you’re self-employed or your income fluctuates, take an average over the last few months. Don’t forget to include occasional income like tax returns, bonuses, or government benefits.
Track your spending.
Go through your last 2–3 months of bank and credit card statements. List out your regular bills (rent, phone, groceries), then your extras (dining out, subscriptions, impulse buys). You might be surprised where your money’s going.
This part isn’t always fun—but it’s empowering. You can’t change what you don’t see.
Step 2: Create a Plan That Works for You
Once you have the full picture, it’s time to make a plan. The basic formula for saving is simple:
Spend less than you earn. Save the difference.
But in real life, it’s more about small adjustments than major sacrifices.
- Cut what doesn’t matter. Cancel unused subscriptions or set a dining-out limit.
- Automate your savings. Set up a separate “down payment” account and auto-transfer money on payday—even if it’s just $50.
- Find ways to boost your income. Can you pick up a side job, sell unused stuff, or ask for a raise?
Consistency matters more than big chunks. Start small and build momentum.
Step 3: Think Bigger Than Just Saving
A lot of people assume saving for a down payment is the first—and only—step toward buying a home. But there’s more to it.
When you apply for a mortgage, lenders look at:
- Your income
- Your debt
- Your credit score
- Your down payment
That means even while you’re saving, you can (and should) be doing things like:
- Building your credit score
- Paying down high-interest debt
- Gathering documents for pre-approval
That’s where we come in.
Step 4: Get Advice Early
Saving up for a home doesn’t have to be a solo mission. In fact, talking to a mortgage professional early in the process can help you avoid missteps and reach your goal faster.
We can:
- Help you calculate how much you actually need to save
- Offer tips to strengthen your application while you save
- Explore alternate down payment options (like gifts or programs for first-time buyers)
- Build a step-by-step plan to get you mortgage-ready
Ready to get serious about buying a home?
We’d love to help you build a plan that fits your life—and your goals. Reach out anytime for a no-pressure conversation.
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For most Canadians, the down payment is the biggest hurdle to homeownership. A down payment is the initial amount you contribute toward your property purchase, while the lender covers the rest through a mortgage. By law, Canadian lenders can only finance up to 95% of a property’s value, which means you’ll need at least 5% down to qualify. If you’re putting down less than 20%, your mortgage must be insured through one of Canada’s three default insurance providers— CMHC, Sagen (formerly Genworth), or Canada Guaranty . This insurance comes at a cost, but it can be rolled into your mortgage amount. The less you put down, the higher the premium. Since saving a down payment can feel overwhelming, it helps to know the different sources you can draw from. Here are the most common options available to Canadian homebuyers: 1. Savings & Personal Resources The most straightforward source is your own savings. Lenders will ask to see a 90-day history of the funds in your account. Any large deposits outside of regular payroll must be explained with documentation—such as the sale of a vehicle or a transfer from an investment account. This requirement isn’t just red tape; it’s part of Canada’s anti-money laundering rules. 2. Proceeds from the Sale of a Property If you’ve recently sold another home, you can use the proceeds as a down payment on your new purchase. Proof of the sale—such as the final statement of adjustments from your lawyer—will be required. 3. RRSP Home Buyers’ Plan (HBP) First-time buyers can withdraw up to $35,000 each (or $70,000 as a couple) from their RRSPs to put toward a down payment under the federal Home Buyers’ Plan . The funds are withdrawn tax-free, but they must be repaid over a 15-year period. This is a popular option for buyers who have been steadily contributing to their retirement savings. 4. Gifted Down Payment With today’s housing prices, many buyers turn to family for help. A parent or immediate family member can provide a gift that makes up part—or even all—of the required down payment. The lender will require a signed gift letter confirming that the money is a true gift (with no repayment expected) and proof that the funds have been deposited into your account. 5. Borrowed Down Payment In some cases, you may be able to borrow your down payment. This option is usually available only if you have strong credit and sufficient income. The payments on the borrowed funds are factored into your debt service ratios, so affordability is key. Lenders typically use 3% of the outstanding balance when calculating the additional payment. The Bottom Line A down payment doesn’t have to come from just one source—it can be a combination of savings, gifted funds, RRSPs, or other resources. What matters most is being able to show where the money came from and that it meets lender requirements. If you’d like to explore your options or learn how much you might qualify for, it’s never too early to start the conversation. Connect with us today—we’d be happy to help you create a plan and take the first steps toward homeownership.
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