To save the largest amount possible, figure out a savings plan — and stick to it. If your down payment is at least 20% of the purchase price of your home, you can apply for a regular mortgage. If you can't save that much, you will have to apply for a high-ratio or second mortgage.
3 tips for saving a down payment
- Keep the money separate from other savings.
- Grow your money safely in no-risk or low-risk investments.
- Save in an RRSP if you're a first-time buyer.
Learn more about short-term savings options.
Make saving automatic
You can arrange for a set amount to be taken each month, from your bank account or from your pay, to help you save. This is often called a Pre-Authorized Debit (PAD), Pre-Authorized Contribution (PAC) or Pre-Authorized Purchase (PAP). Learn more about automatic savings plans.
Saving in an RRSP
You can use an RRSP to save your down payment for your first home. Your contributions are tax deductible. And you can take up to $25,000 from the RRSP for your down payment when you are ready to buy. Under the federal government’s Home Buyers’ Plan, you won’t pay any tax on the money as long as you pay it back over the next 15 years.
Your employer may offer
savings plans suitable for down payment savings that allow for payroll deduction contributions.