Saving up for Your Dream Home

Jackson Middleton • June 5, 2018

If you’re just starting out on a journey of homeownership, the prospect of coming up with a hefty down payment can bring that trip to a quick halt.

Whether you’re a young person starting out in adult life, or your income has stalled for years, putting together a five or even six-figure down payment on a home can seem virtually impossible. And while it isn’t easy with all the other costs in life, it is possible but it does take some discipline.

Mortgage brokers have seen it all. We’ve had clients living in big homes and driving fancy cars, only to find out they have nothing in their savings. On the other hand, we’ve seen clients making a below average salary with six figures in their bank accounts because they’ve been disciplined in saving over many years.

So it really depends on the person.

Regardless of what you earn, put aside 10 per cent of what you get paid. While that sounds nice, you might be wondering how that’s even possible, especially if you’re not used to saving. I’d recommend having that money put aside in an automated way. All the banks offer services that can help you force save.

Though it might feel painful at first, after a couple months you’ll get used to it and you won’t miss the extra money at all.

If you’re a saver, you’re eventually going to get where you need to be, maybe not as quickly as you’d like but if you’re a spender then you’ll likely be on treadmill to nowhere.

At the end of the day, when you get in the true habit of saving, it’s amazing how quickly that will compound and how quickly you can save a lot of money.

Now that you’re on track to save, there is another aspect you need to know about your down payment.

While this might sound contrary to conventional wisdom, a bigger down payment isn’t necessarily better, or the goal.

Sure, if you have no debt at all, put as much down as you can.

But most of us have some debt, and many of us are carrying a lot of debt and paying out hundreds of dollars a month to keep the bill collector away. You are better off putting less down and using the rest to pay off your consumer debt.

Keep in mind, every $400 in monthly payments roughly translates into $100,000 of purchasing power on a mortgage. If you can get rid of existing consumer debt, you’ll qualify for the larger amount you’re looking for without having larger down payment.


This articles was originally published as part of the Dominion Lending Centres newsletter, but we liked it, so we published it on our blog as well. If you’d like personalized advice, any one of our Canadian Mortgage Experts would love to talk with you.

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