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Managing Your Money

A larger down payment goes a long way toward reducing your mortgage payment. We can help you manage your money to plan a budget and save on interest costs.

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  • Down payment options
    All you need for the down payment is 5% of the purchase price of your home. For a home that costs $300,000, that’s only $15,000.

  • Different kinds of mortgages
    House on beach.
    • You qualify for a conventional mortgage when your down payment is 20% or more of your home’s purchase price.
    • If you put down less than 20% you must purchase Mortgage Default Insurance. Pay a one-time insurance premium up front or add it to your mortgage.
    • If your home’s purchase price is $1 million or more, you must put down at least 20% to get a mortgage and have enough cash to cover closing costs.
    • You need at least 1.5% of the purchase price to cover the closing costs for a high-ratio mortgage so you can qualify for mortgage default insurance.

  • Start saving for a mortgage down payment
    To save for a mortgage down payment there are many sources you may be able to tap into, including:
    • Personal savings: Review your chequing and savings accounts and Tax-Free Savings Accounts
    • Registered Retirement Savings Plans (RRSP): Under the Canada Revenue Agency (CRA) Home Buyers’ Plan (HBP), you and your spouse or common-law partner may be allowed to withdraw up to $25,000 each from your RRSP as a tax-free loan that you pay back in equal installments over 15 years
    • Gifts from family: This could be a one-time gift or accumulated cash gifts from special occasions
    • Assets: Check for insurance dividends, Canada Savings Bonds (CSBs), Guaranteed Investment Certificates (GICs), term deposits, non-registered equities
    • Unexpected income: An income tax refund, work bonus or the extra income from a raise are all potential sources
    • Set money aside: Open a dedicated savings account to keep it separate from your day-to-day finances
    • Make saving automatic: Set up a Continuous Savings Plan to make it easier to save regularly. Find out how much you can save, with the:
    Continuous Savings Plan Calculator
    • Put your savings to work: Choose an investment option based on your anticipated time horizon
    • Keep the taxes: Accumulate your savings (up to $5,500 a year, per person) in a Tax-Free Savings Account, and you won’t pay tax on the money you earn
    Piggy bank, saving money.

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