Are you ready to start saving for a down payment on your dream home but not sure where to start? The first thing is to determine how much of a down payment you’ll need. The minimum amount you will need depends on the home purchase price, but it ranges from 5% – 20% of the purchase price.
|Purchase Price of your home||Minimum amount of down payment|
|$ 500,000 or less||5% of the purchase price|
|$ 500,000 to $999,999||5% of the first $500,000 of the purchase price
10% for the portion above $500,000
|$ 1 million or more||20% of the purchase price|
Once you’ve figured out roughly how much you’ll need, here are some simple ways to save for a down payment.
Cut your expenses – Look at your budget and see if there are any expenses you can reduce. It might not seem like much but if you reduce your entertainment or dining out costs for a year, that money could be put towards to your down payment fund.
Skip a vacation – Consider skipping a vacation this year and enjoy a staycation instead! You’ll be able to put a nice chunk in your down payment fund, while still getting to enjoy a staycation holiday!
Automate your savings – You can arrange with your bank to automatically transfer a certain amount from your chequing account into your savings account every pay period. This is a great way to save as you don’t have to think about it – the money comes out of your account each month automatically!