Buying a home is one of the biggest financial decisions you'll ever make. The good news? With a solid plan and consistent saving, homeownership is absolutely achievable. This guide breaks down exactly how much you need, where to keep your savings, and how to get there faster.

How Much Do You Actually Need?

Before you start saving, understand the full picture of home buying costs:

Down Payment

In Canada, the minimum down payment depends on the purchase price:

Under $500,000: 5% minimum
$500,000 - $999,999: 5% on first $500K, then 10% on the rest
$1 million+: 20% minimum

Example: For a $600,000 home, you'd need at least $35,000 (5% of $500K + 10% of $100K).

Pro tip: Putting down 20% or more avoids costly mortgage insurance (CMHC), which can add thousands to your costs.

Closing Costs

Budget an additional 1.5-4% of the purchase price for:

Land transfer tax
Legal fees
Home inspection
Title insurance
Moving expenses

For a $500,000 home, expect $7,500-$20,000 in closing costs.

Emergency Fund for Homeownership

Don't drain your savings completely. Keep 3-6 months of expenses separate for emergencies, plus a home maintenance fund (1-2% of home value annually).

Total Savings Target

For a $500,000 home with 10% down:

| Category | Amount | |----------|--------| | Down payment (10%) | $50,000 | | Closing costs (2.5%) | $12,500 | | Emergency fund | $15,000 | | Total needed | $77,500 |

Canadian Tax-Advantaged Accounts for Home Buyers

First Home Savings Account (FHSA)

The FHSA is the best account for first-time buyers:

Contribution limit: $8,000/year, $40,000 lifetime
Tax treatment: Contributions are tax-deductible (like RRSP), withdrawals are tax-free (like TFSA)
Eligibility: First-time home buyers, 18+ years old
Time limit: Must use within 15 years of opening

Strategy: Max out your FHSA before other accounts. You get a tax refund now AND tax-free growth.

RRSP Home Buyers' Plan (HBP)

You can withdraw up to $60,000 from your RRSP for a home purchase:

Tax-free withdrawal
Must repay over 15 years (or amounts become taxable income)
Can combine with FHSA for up to $100,000 total

Strategy: Use as a supplement to FHSA if you need more, but remember you'll need to repay it.

TFSA

Great for additional savings beyond FHSA limits:

Contributions aren't tax-deductible
Growth and withdrawals are tax-free
No repayment required
Flexible access anytime

Creating Your Savings Timeline

Reverse Engineer Your Goal

If you need $80,000 and want to buy in 5 years:

$80,000 ÷ 60 months = $1,333/month needed

Can't save that much? Either:

Extend your timeline
Reduce your target purchase price
Find ways to increase savings

Sample Timeline

| Year | FHSA | RRSP | TFSA | Total Saved | |------|------|------|------|-------------| | 1 | $8,000 | $5,000 | $3,000 | $16,000 | | 2 | $8,000 | $5,000 | $3,000 | $32,000 | | 3 | $8,000 | $5,000 | $3,000 | $48,000 | | 4 | $8,000 | $5,000 | $3,000 | $64,000 | | 5 | $8,000 | $5,000 | $3,000 | $80,000 |

Plus investment growth could add another 10-15% to your total!

Where to Keep Your Down Payment Savings

The right account depends on your timeline:

Buying in 1-2 Years

Keep funds safe and accessible:

High-interest savings account (HISA)
GICs (Guaranteed Investment Certificates)
Money market funds

Why: You can't afford to lose money right before you need it.

Buying in 3-5 Years

Moderate risk is okay:

Conservative balanced funds (60% bonds, 40% stocks)
Target-date funds
GIC ladders

Why: Some growth potential while limiting downside risk.

Buying in 5+ Years

More growth potential:

Balanced or growth ETFs
Index funds
Diversified portfolio

Why: You have time to recover from market dips.

Strategies to Save Faster

Automate Your Savings

Set up automatic transfers on payday. What you don't see, you won't spend.

Use Windfalls Wisely

Put these directly toward your house fund:

Tax refunds (especially from FHSA/RRSP contributions)
Bonuses
Gifts
Side hustle income

Cut Big Expenses Temporarily

The fastest way to boost savings:

Downsize your rental temporarily
Get a roommate
Sell a car and use transit
Pause expensive subscriptions

Even 2-3 years of sacrifice can accelerate your timeline dramatically.

Increase Your Income

Every extra dollar can go to your house fund:

Ask for a raise
Pick up overtime
Start a side hustle
Freelance your skills

When You're Ready to Buy

Before you start house hunting:

Get Pre-Approved

A mortgage pre-approval:

Confirms your borrowing power
Shows sellers you're serious
Locks in an interest rate

Know Your True Budget

Just because you're approved for $600K doesn't mean you should spend it. Consider:

Monthly payment you're comfortable with
Future income stability
Other financial goals
Lifestyle you want to maintain

Don't Forget Ongoing Costs

Homeownership costs more than rent:

Property taxes
Home insurance
Utilities (often more than renting)
Maintenance and repairs
Condo fees (if applicable)

Common House Saving Mistakes

Waiting until you're "ready": Start with whatever you can, even $100/month
Keeping savings in checking: Use designated savings accounts
Investing too aggressively short-term: Don't risk your down payment in stocks if buying soon
Forgetting closing costs: Many buyers are caught off guard by these
Draining emergency fund: Keep some safety net intact

Track Your Progress

Seeing your savings grow is incredibly motivating. Use a budgeting app to:

Track contributions to each account
Visualize progress toward your goal
Celebrate milestones along the way

Zeru can help you track your house fund alongside your regular budget, so you can see exactly how each month brings you closer to homeownership.

The Bottom Line

Saving for a house takes time and discipline, but it's one of the most rewarding financial goals you can pursue. Start with whatever you can today, use tax-advantaged accounts strategically, and watch your down payment grow.

Your future home is waiting. Start building toward it now.

How to Save for a House: A First-Time Buyer's Complete Guide