💸 Down Payments 101: How Much You Need & How to Save for Your First Home

Are you thinking about buying a home but unsure how much you actually need for a down payment? You’re not alone—this is one of the most common questions I get from first-time buyers in Saskatoon and beyond.

The truth is, your down payment is one of the most important pieces of the homeownership puzzle. It affects your mortgage, your interest rate, your monthly payments—and ultimately, how soon you can own your dream home. 

In this article, I’ll break down exactly how much you need, how it impacts your loan, how to save faster, and what mistakes to avoid. Let’s dive in!

🏡 What Is a Down Payment?

A down payment is the upfront cash you contribute toward purchasing a home. The rest is covered by your mortgage from a bank or lender.

💡 Why it matters:
The size of your down payment affects:

• Your monthly mortgage payment

• Your interest rate

• Your ability to avoid mortgage insurance

• Your equity in the home from day one

📊 How Much Do You Really Need in Canada?

Here’s the breakdown based on your home’s purchase price:

• ✅ 5% for homes priced up to $500,000

• ✅ 10% for the portion between $500,000 and $999,999

• ✅ 20% for homes over $1M or to avoid CMHC mortgage insurance

💬 Example:
A $400,000 home = minimum $20,000 down payment (5%)
A $600,000 home = $35,000 minimum ($25K for first 500K + $10K for the rest)

📌 Pro Tip:
If your down payment is under 20%, you’ll need mortgage default insurance (aka CMHC insurance), which protects the lender—not you.

💰 How Your Down Payment Affects Your Mortgage

The size of your down payment has a direct impact on the financial side of your purchase.

More down = More savings.

• 📉 Lower Monthly Payments – You’re borrowing less.

• 🧾 Better Interest Rates – Lenders offer lower rates to less-risky borrowers.

• 💼 More Home Equity – You build ownership faster.

💬 Example:
A $400K home with 5% down = $380K mortgage
Same home with 20% down = $320K mortgage (less interest, lower payments!)

💡 Creative Ways to Save for Your Down Payment

If you’re struggling to save enough, here are smart, proven ways to boost your savings:

1. 🏦 RRSP Home Buyers’ Plan

Withdraw up to $35,000 tax-free from your RRSP to use as a down payment.

2. 📈 First Home Savings Account (FHSA)

Save up to $8,000/year tax-free and up to $40,000 total. Best of both RRSP & TFSA worlds!

3. 💼 Side Hustles or Extra Income

Rent a room, freelance, or drive Uber. Put all extra earnings in a down payment-only account.

4. 🎁 Government Incentives

Programs like the First-Time Home Buyer Incentive reduce your upfront burden.

5. ✂️ Cut Back and Automate

Cancel unused subscriptions, limit takeout, and auto-deposit into a savings account weekly.

📌 Jack’s Tip:
Open a separate savings account just for your down payment—it’s easier to track and harder to spend.

🚨 Common Down Payment Mistakes to Avoid

Don’t fall into these common traps:

• ❌ Not budgeting for closing costs – Legal fees, home inspections, moving = 3–5% more.

• ❌ Wiping out your savings – Keep an emergency fund!

• ❌ Waiting too long – Home prices and rates may rise faster than you can save.

• ❌ Not getting pre-approved – Know what you can afford before shopping.

📌 Work with a mortgage broker or experienced agent (like me!) to create a customized savings strategy.

✅ Final Thoughts: Down Payments Made Simple

Your down payment doesn’t have to be overwhelming. With the right plan and some financial discipline, you can fast-track your way to homeownership.

Whether you’re buying your first home or upgrading, I’m here to walk you through the process with expert advice tailored to Saskatoon’s real estate market.

📞 Ready to take the next step?
Call me, Jack Bouvier, at (306) 370-6179, or check out the links in the description.

Let’s build your down payment plan and get you one step closer to your dream home. 🏡✨