Six Tips to Save Down Payments Sooner

Four to seven years to save down payments for a home or condo. Whoever heard of such a thing?

That’s how long the National Bank of Canada estimated it would take metro Ontario home buyers to save down payments in 2021. The gap gets wider in Toronto, where 26.5 years was the average for homes, and five years for condos.   

Preposterous, you say? 

Save down payments sooner. Here are the 6 tips for saving for the down payment that can help you reach your goal. 

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  1. Pay down debt.

How much you should save for a down payment depends on your desired neighbourhood and resources. If your first thought is but where can I save for a down payment, the place to start is by reducing your debts. 

You want to have some debt when save down payments. That gives mortgage lenders a sense of your credit history and trustworthiness — whether you make payments on time, and how much debt you can manage.

Too much debt can work against you. Paying off negative debts like credit cards or vehicle loans you don’t absolutely need to get to work can improve your credit score, and lower your debt-to-income ratio. That will help you qualify sooner for CMHC high ratio mortgages with 5% to 10% down. See new rules for making a down payment on a house in Ontario. 

  1. Save your salary.

Save down payments for a home in metro Toronto at 10% of your salary, and you could reach your goal in 26.5 years. That’s provided you make $196,913 annually. Hitting that target sooner requires strict budgetting. You may have to move in with the folks — 47.4% of millennials surveyed by the University of Waterloo’s did. 

Seriously, e-transferring a higher fixed percentage of your salary to a forced savings plan can help. Manage those caffè latte splurges by buying your own espresso machine. Re-gift presents (discreetly) when you can. Selling possessions like that ATV or motorbike can put instant cash in your savings account.     

  1. Get a job.

Part-time, second, or remote jobs add income while you save for down payments. Go to online job boards like Indeed to find extra income, or try the Ontario job bank for opportunities. Federal, provincial, and municipal governments have seasonal positions. You can search Ontario wide at Go Jobs. Time to test out your artistic or woodworking skills? Companies like TELUS sponsor start-ups, or apply for funding at

How to write a home buyer’s agreement of purchase and sale. 

  1. Save Tax Free

Save your money tax free in a Tax-Free Savings Accounts (TFSA) or Registered Retirement Savings Plan (RRSP). TFSAs let you save down payments and earn interest tax fee by accumulating money year over year. You can save down payments by contributing $6,000 this year, then adding another $6,000 next year, or whatever government’s annual limit may be. Withdraw any amount any time you want, then recontribute it at your leisure. Calculate your yearly TFSA contribution limits. 

RRSPs offer up front tax savings. Reduce your income taxes by deducting RRSP contributions in the year you make them. Contributions collect interest tax free until you withdraw or cash them, or take payments from your RRSP. 

As the name suggests, it’s a retirement fund, so you’ll have to withdraw or convert your funds to a Registered Retirement Investment Fund by 71. Best yet, you and your spouse can withdraw up to $35,000 each towards a down payment for a first home for yourselves or a relative with a disability. See who qualifies for the home buyers’ plan. 

Other ways to use RRSPs for the minimum down payment in Canada. 

  1. Sell your car.

Even a used car can tack $750 onto your monthly expenses. Car payments, gas, tires, everyday maintenance, and those annoying repairs can add up quickly. Besides, didn’t you commit to “go green”? Now could be the time to move closer to your work and shopping centres, walk or bike more often, or take the GO or TTC.  

How the home buyers bill protects you. 

What to Do If Your Home Deal Fizzles

At the end of the day, if you just can’t save a down payment fast enough to close a real estate transaction, you can always try to cancel your offer to purchase. Be forewarned: the seller must give mutual consent to cancel, or you could forfeit your hard-earned deposit, and be liable for their costs. Our real estate lawyers can review your agreement of purchase and sale for options for withdrawing. Cancel a house purchase agreement in Ontario.  

Wondering which down payment is best? The more you put down, the more interest you save. Check out these mortgage options. 

Why You Need a Real Estate Lawyer

Ready to buy? Axess Law’s virtual real estate lawyers review your agreement of purchase and sale or your buyer’s right to cancel, and home inspection clauses that protect you from serious defects.

Our professional legal team goes over the fine print with you, and negotiates with the sellers’ lawyer if changes are advisable. We check you have condo status certificates, and fire insurance binders essential to closing a condo transaction. 

Does your home inspection report reveal troubling secrets? Axess Law’s real estate lawyers  discuss the report with the sellers’ lawyer to ask for minor repairs, or a reduced sales price so you can fix problems after you buy.  

Who gets the deposit when a buyer backs out. 

Axess Law searches title to your new property for unexpected construction liens, or financial charges that could stall or prevent a sale. Your lawyer transfers title to the property via a local land registry and, if desired, can add family members to the title for you. When the deal is done, we give you the keys to your new home.

What to bring to your lawyer appointment.  

Affordable Real Estate Lawyers, Anywhere You Are 

Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario  when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it. 

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Book Online or By Phone

Call Axess Law toll free at 1-877-402-4207 (647-479-0118 in Toronto) for video conferencing appointments with virtual real estate lawyers anywhere in Ontario. You can meet in person with lawyers at any of our convenient Greater Toronto Area or Ottawa law offices Drop by Axess Law locations or go online. Use our easy web booking form to select dates and times that work for you.

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