Many people receive assistance from their parents or other relatives. Money provided in the form of a gift or an early inheritance can be used towards your down payment, provided it doesn't have to be paid back. Your lender will request written confirmation if this is your source of down payment including details of the family member providing the gift so it can be confirmed.
Automatic Savings Plan
If you won't be buying for several years, it's a good idea to open a dedicated savings account. Even better: start a Continuous Savings Plan, where you arrange for a certain amount of money to be withdrawn from your chequing account and deposited into a savings account automatically on a regular basis.
Tax-Free Savings Account
In a TFSA, there is no tax on annual earnings and no tax on withdrawal. Contribute up to $5,500 a year, and if you contribute less than this, you can carry forward any unused contribution room in case you want to contribute more next year. Savings Tip: Let's say you pay $800 a month in rent, and your anticipated mortgage will be $1,200. Why not put the $400 difference into savings? In just one year, you'll have $4,800 (plus interest) for your down payment.
How BMO Can Help
We have everything you need to bring you closer to achieving your down payment goals. We can set up a Continuous Savings Plan for you to make saving easy and affordable. Based on your timelines, we can recommend appropriate savings and investment solutions, including BMO Mutual Funds7 , BMO Term Investments, and a Smart Saver Account. We can also provide information about the Home Buyers Plan program and set up the paperwork, no matter where you hold your RRSPs.