9 Tips to Help You Save for a Down Payment
Published on 8 February 2019 in Blog Home Buying Tips Tips by
Last updated on July 25th, 2025 at 03:39 pm
Saving enough money for a down payment to buy a home in Ottawa can be a challenge. Sometimes, it can require you to think outside of the box to collect the amount that you need. If you’re wondering how to save for a down payment, here are nine practical strategies to help you get closer to homeownership:1. Automate Your Savings
If you’ve been trying to put a little money here and there into your savings account, you’re probably no closer to your goal than when you first started. To really save quickly, you need to automate your payments and lock them into an account that you can’t touch. This will keep you disciplined with your money and help you build it up much faster. Try starting with as little as 10 percent a month of your income, and slowly adjust over time until you start to feel a pinch on your day-to-day expenses. Once you’ve obtained the appropriate level at which you can still live comfortably and barely notice the reduction, set that amount and watch the savings grow.2. Embrace Frugal Living
There are also several ways to cut down on your expenses to help you save faster for a mortgage. Examples include that annual trip you take each year down south. Instead, perhaps stay closer to home and go camping, or take advantage of a stay-cation to save big. Alternatively, perhaps you can ride your bike to work instead of driving a few times per week to save on parking and gas costs. You can even try to shop at a different grocery store, get rid of that gym membership you never use, switch phone providers, or avoid buying new clothes this year to save some money that you can add to your savings account.
3. Leverage Your RRSP with the Home Buyers’ Plan
If you’ve already been saving for your retirement, you can transfer those savings over to help finance your first home. In fact, it’s a program called the Home Buyers Plan. It allows you to take out the money you’ve saved in your RRSP and use it towards your down payment with zero tax consequences. What’s the catch? You will need to repay the amount you withdraw within 15 years, starting the second year after your withdrawal. While the repayment amounts are flexible, you will be required to make at least the minimum annual payment to avoid penalties.4. Take on Extra Work
One of the fastest ways to boost your income quickly is by taking on some extra shifts at work or getting a second job. It’s not everyone’s favourite way to save, but it’s an extremely effective way to get more money flowing in. If you can afford the time and energy, especially if you don’t have children or pets to attend to, consider your options. And make sure you love what you do, as it will be a less stressful experience while balancing two jobs in that field! If you are not sure where to begin, start by exploring your skills and interests:- If you are handy around the house, consider offering handyman services.
- If you enjoy working with children, you may want to consider babysitting or tutoring.
- If you love animals, consider providing local dog walking or pet sitting services.
- If you are skilled in photography, writing, or graphic design, you could start a freelancing gig.
- If you enjoy driving, consider hustling through rideshare or food delivery services.
5. Eliminate High-Interest Debt
Paying off your debt is imperative. Trying to save while having to dish out money each month towards your debt and interest can make it feel next to impossible to save anything. Start with high-interest payments first, like credit cards. Then pay off your car loan or any personal loans. If you have multiple high-interest loans, consider consolidating your debt into a lower-interest option, such as a personal line of credit. Not only will the payments be easier to manage, but you will save considerably on the interest payments alone. Zap accumulating interest first, then you can start to build up a nest egg.6. Reevaluate and Prioritize Spending
Saving for your down payment needs to be your top priority. That means other non-essential expenditures, like entertainment, dining out, and shopping need to be lower on the list. A romantic dinner at a swanky restaurant or going to see the latest blockbuster at the cinema costs money that could be going toward your down payment.
Just because you’re not spending excessively doesn’t mean you can’t have fun, though. Have a date night at home with homemade pizza and Netflix. Make coffee at home before heading out to work. Batch prep lunches on the weekend so you don’t waste money on buying takeout lunches every day. Don’t deprive yourself, but don’t spend money needlessly, either. Every Frappuccino sets you a few dollars back from reaching your savings goal!
7. Build and Stick to a Monthly Budget
Creating a budget can be beneficial for saving while helping to stick to the priority list. Once you tally up what you need to save, how much income you earn, and what all of the important necessary expenses are (such as utility bills and rent), then create a budget to help keep your spending habits on track. There are several budgeting methods you could try. One popular framework is the 50/30/20 method, which involves allocating:- 50% of your income to essential expenses
- 30% to wants and nice-to-have items
- 20% to repaying debt or saving for a down payment
8. Open a TFSA for Tax-Free Savings
Tax-Free Savings Accounts (TFSAs) are a great vehicle for savings, and some folks even prefer them to RRSPs. Not having to pay tax on the money you earn can be a major benefit when you’re trying to accomplish your down-payment goal. You can even automate payments to pull directly from your chequing account each pay period. The key to success here is to find investments that offer stability and predictable returns. Consider investing your TFSA funds in low-risk options, such as GICs, high-interest savings accounts, or conservative mutual funds, to keep your savings growing without risking your down payment. Don’t forget to track your contributions, as exceeding your TFSA limit can lead to penalties.9. Consult a Financial Advisor
Having a solid savings plan in place is key. That’s why talking to a professional who understands all the financial instruments that can be utilized to help you save faster is crucial. They’ll help you set an appropriate budget, give you some handy strategies to save, and set you up with an account to save even more quickly.
An experienced advisor can also offer valuable insights into current government programs that you may be eligible for, like the First Home Savings Account or a Land Transfer Tax Rebate. They will consider your risk tolerance and timeline and guide you through options you might not have known existed! Even a one-time consultation can provide valuable insights and motivation to stay on track.