{"id":822,"date":"2012-03-15T14:32:15","date_gmt":"2012-03-15T18:32:15","guid":{"rendered":"http:\/\/canadianbudgetbinder.com\/?p=822"},"modified":"2025-02-26T08:01:53","modified_gmt":"2025-02-26T08:01:53","slug":"canada-mortgage-save-down-payment","status":"publish","type":"post","link":"https:\/\/digitalskyweb.co\/canadianbudgetbinder.com\/2012\/03\/15\/canada-mortgage-save-down-payment\/","title":{"rendered":"How We Saved For A Mortgage Down Payment"},"content":{"rendered":"\n

<\/span>Estimated reading time: <\/span>9<\/span> minutes<\/span><\/p>\n\n\n\n

Saving for a down payment on a home is probably one of the biggest goals many people set out to achieve when they want in on the real estate market.<\/p>\n\n\n\n

Saving A Down Payment For Your First Home<\/h2>\n\n\n\n

Are you thinking of making a move into home ownership? <\/p>\n\n\n\n

Deciding whether you should continue to rent or buy a home<\/strong> <\/a>is a decision only you can make.<\/p>\n\n\n\n

People often ask me why I chose to buy a home so young when I was living in the UK. <\/p>\n\n\n\n

I decided to buy so young because my parents taught me the value of money early<\/strong>.<\/a><\/p>\n\n\n\n

It took me years, but I saved my money because I knew I could make more money over time if I invested it wisely. <\/p>\n\n\n\n

I also realized that I didn’t want to rent but own my land.<\/p>\n\n\n\n

It wasn’t easy, and I had to give up spending my money on holidays, pub nights, etc, to reach my goals.<\/p>\n\n\n\n

Working long hours got me into homeownership by having no debt and paying cash for everything.<\/p>\n\n\n\n

Mrs. CBB was the same way growing up, so we understood personal finance.<\/p>\n\n\n\n

We discussed money when we were dating, a topic we bonded over because it was a passion for us both. <\/p>\n\n\n\n

While we were young, we both wanted to save money, hoping for an early retirement<\/strong><\/a> while enjoying good health.<\/p>\n\n\n\n

Five years after buying our first Canadian home, we became mortgage free<\/a><\/strong>, although we have no kids yet. (Update 2023, we now have a 9-year-old son)<\/p>\n\n\n\n

We follow all the tips I share in Canadian Budget Binder to achieve our debt freedom. <\/p>\n\n\n\n

Budgeting and planning your goals can get you to debt freedom faster than any other plan.<\/p>\n\n\n\n

Purchasing My First Home<\/h2>\n\n\n\n

When I purchased my first flat in the UK at around 21<\/strong><\/a>, I saved about 10% as a down payment. <\/p>\n\n\n\n

Back then, you didn’t need to put anything down and could pick up a mortgage at 100% but at a higher interest rate. \\<\/p>\n\n\n\n

Many people took advantage of the 100% mortgage. However, I’m glad I was not part of that group.<\/p>\n\n\n\n

I bought my first flat at GBP 19,000 (Great British Pound) in the late 90’s. <\/p>\n\n\n\n

Two years later, I sold my flat for a three-bedroom home for GBP 49,000. <\/p>\n\n\n\n

Today my old flat is worth about 60,000 pounds, that would be about a 200% profit if I sold it today. <\/p>\n\n\n\n

Although that’s not the case, I sold it for GBP 23,000.<\/p>\n\n\n\n

I sold my three-bedroom home in 2006 for $128,000, making a profit of GBP 79,000 plus what I initially invested and paid down over the years. <\/p>\n\n\n\n

Remember that money didn’t end up in my pocket after paying all the people I needed to pay.<\/p>\n\n\n\n

Over the next few years, we learned all we could about the Canadian real estate market to ensure we were well-informed before jumping in! <\/p>\n\n\n\n

Below is what we learned about buying a home and what we needed to do to make that happen.<\/p>\n\n\n\n

Planning<\/span> A Home Purchase <\/h2>\n\n\n\n

Plan for the type of home you want, especially if you have specific “must haves” on your list. <\/p>\n\n\n\n

Know what area you want to live in, and once you know how much money your lender will give you, this will help you make final decisions.<\/p>\n\n\n\n

If you want a more in-depth look, don’t hesitate to visit open houses<\/a> <\/strong>in the areas you fancy living. <\/p>\n\n\n\n

This will help you walk around and create a list of what you want in your future home.<\/p>\n\n\n\n

Minimum Downpayment To Purchase A Home<\/h2>\n\n\n\n

What Is the Minimum Down Payment On A House?<\/strong><\/p>\n\n\n\n

I suggest the minimum down payment on a house is saving the complete 20% to put down your mortgage. <\/p>\n\n\n\n

This also helps avoid the CMHC fees that come with it if you don’t. <\/p>\n\n\n\n

If you don’t have the 20%, it might not be the right time to purchase a home. <\/p>\n\n\n\n

The last thing you want to do is be house poor even if the interest rates are low.<\/p>\n\n\n\n

Remember, interest can shoot up in a blink of an eye, so plan for them. <\/p>\n\n\n\n

Make two family budgets looking at different scenarios, higher interest rates, for example, or what if one spouse gets injured or loses a job. <\/p>\n\n\n\n

Know what you can afford, and never overextend yourself.<\/p>\n\n\n\n

Becoming Mortgage Free <\/h2>\n\n\n
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\"How<\/figure>\n<\/div>\n\n\n

How old do I want to be when my house is paid off?<\/strong><\/p>\n\n\n\n

If you don’t want to pay off your home right into retirement or even after, try to gauge when you would like to be mortgage-free. <\/p>\n\n\n\n

I encourage you to speak with a financial representative to see the process. <\/p>\n\n\n\n

If this is your first home, it may not be your last, as many people move a few times before settling in their forever home.<\/p>\n\n\n\n

You can talk to a Mortgage Broker or a Mortgage Lender<\/strong><\/a> at your local bank.<\/p>\n\n\n\n

Don’t forget to plan for closing costs<\/strong> which many people fail to factor into buying their home, which could cost you thousands of dollars. <\/p>\n\n\n\n

Related: Should You Get Mortgage Insurance or Life Insurance?<\/a><\/strong><\/p>\n\n\n\n

You can also use this handy Mortgage Calculator<\/strong><\/a>, but I suggest talking to your financial institution first.<\/p>\n\n\n\n

Income\/Assets\/Liabilities<\/span><\/h2>\n\n\n\n