Keep imagining the day you get the keys
Saving for a down payment requires a temporary adjustment in priorities. But it is worth it when you imagine yourself walking through the door of your very own home. Giving up some of your current spend may seem difficult at first. Remember: the reward of home ownership will come faster if you stay committed to your plan.
Teamwork can help you save for a down payment.
Couples who agree on priorities can work together and save faster by finding ways to cut back on expenses and increase savings.
It’s OK to pick a team leader.
People excel at different tasks. If you’re buying your first home with a co-borrower, try splitting up the duties and assigning a leader to each one. It may feel like more of a team effort. The important thing is to keep the lines of communication open and focus on your strengths.
Include your friends
Tell everyone that you’re saving for your first home. They’ll likely support you and understand if you spend a little less on going out or shopping. Share your goal with friends and ask homeowners for advice on how to stay motivated and keep saving.
As you settle into your new life in Canada, it's important to pick a bank that can help you build a solid financial foundation. One of the biggest financial decisions you will make when putting roots down in your new country is the purchase of a first home. TD can help you finance your first home in Canada, even if you have no credit history1. Even if you have no credit history, you may qualify for a TD mortgage or TD Home Equity FlexLine if:
- You are a permanent resident or have applied to become a permanent resident in Canada
- AND you have been in Canada for 5 years or less
- Speak to a Mortgage Specialist.
Using your RSPs to help with your down payment
As a First-time Home Buyer, you have the option of using your RSP funds toward your down payment. For many people, that's just the boost they need to afford their first home.
- Withdraw up to $25,000, in a calendar year, from your RSPs for a home purchase (up to $50,000 for a couple)
- You then have 15 years to repay your RSP (other conditions apply)
- Find out more about the RSP Home Buyers' Plan
If you're considering this option, a TD Mortgage Specialist can discuss the pros and cons of using your RSPs to help you make a down payment.
Pros & cons of using your RSPs to help with your down payment
It’s important to discuss the advantages and long-term implications with a qualified financial advisor or your TD Mortgage Specialist.
- You can withdraw up to $25,000, allowing you to make a larger down payment.
- A larger down payment may help you avoid the need to purchase mortgage default insurance.
- A larger down payment typically means lower monthly payments making home ownership more affordable
- You’ll be giving up potential growth of your RSP savings.
- You’ll need to repay the money you withdraw within 15 years, so you’ll need to budget for that expense.
- Failure to pay back the money you withdraw will have tax consequences. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer's income.
Learn more about the RSP Home Buyers’ Plan from Canada Revenue Agency.
Using your TFSA to help with your down payment
A Tax-Free Savings Account (TFSA) is a type of registered plan where you can save or invest up to $5,5002 a year. Any unused contribution room is carried forward. Unlike other types of savings, you’re not taxed on the income you earn. It’s a great way to save for your short- or long-term goals because it lets your savings grow – tax-free.
If you withdraw money from your TFSA account to help pay for your down payment, you’re under no obligation to pay it back. If you want to put the money back, you simply have to wait until the next calendar year or later.3