{"id":17584,"date":"2020-03-13T14:31:03","date_gmt":"2020-03-13T18:31:03","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=17584"},"modified":"2020-03-13T14:31:06","modified_gmt":"2020-03-13T18:31:06","slug":"should-i-save-or-invest-for-a-home-down-payment","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/should-i-save-or-invest-for-a-home-down-payment\/","title":{"rendered":"Should I Save or Invest for a Home Down Payment?"},"content":{"rendered":"\n

By: Ratehub.ca<\/strong><\/p>\n\n\n\n

If you\u2019re reading this article, there\u2019s a high chance that purchasing a house or condo is somewhere on your horizon. It\u2019s also likely that you\u2019re already aware the first step to homeownership is saving up (or investing) funds for the down payment.<\/p>\n\n\n\n

Saving or investing for a down payment is undoubtedly a timely process, especially if you\u2019re currently renting or have other costly expenses each month. It\u2019s also harder if you live in a major metropolitan area with a rising cost of living.<\/p>\n\n\n\n

This hurdle is an all-too-familiar one among many Canadians looking to purchase their first property.<\/p>\n\n\n\n

That\u2019s why this article takes a closer look at the best savings accounts and investing options for potential home buyers. It focuses mainly on using the right accounts and how to maximize the amount of time before you\u2019re ready to transition from renter to owner.<\/p>\n\n\n\n

Saving vs. Investing for a Home Down Payment<\/h2>\n\n\n\n

Someone trying to get enough money together for a down payment has the option of either saving, investing, or a mixture of both. <\/p>\n\n\n\n

Strategies for down  payment saving and investing are endless, but knowing how specific accounts work is the first step in developing the most effective strategy, as all saving and investing accounts come with their own benefits and drawbacks.<\/p>\n\n\n\n

Below, we\u2019ll show you how a Tax-Free Savings Account (TFSA), a Registered-Retirement Savings Plan (RRSP), and a High-Interest Savings Account (HISA) all pose as suitable savings account options for future homeowners.<\/p>\n\n\n\n

We\u2019ll also take a look at various investment options and products, and whether they\u2019re suitable for a down payment saving strategy.<\/p>\n\n\n\n

Saving for a Down Payment on a House or Condo
<\/strong><\/span><\/h3>\n\n\n\n

Saving is the \u201cslow-and-steady\u201d approach when it comes to building wealth, but it\u2019s also the safest and easiest method of money management.<\/p>\n\n\n\n

There are three accounts that you can use to save up for a down payment, all of which come with benefits unique and useful for potential home buyers.<\/p>\n\n\n\n

These accounts are the Tax-Free Savings Accounts (TFSA), the Registered Retirement Savings Plan (RRSP), and the High-Interest Savings Account (HISA).<\/p>\n\n\n\n

Tax-Free Savings Accounts (TFSAs)
<\/strong><\/span><\/h3>\n\n\n\n

Most Canadians over the age of 18 or 19 already have a Tax-Free Savings Account (TFSA), but a majority of TFSA holders are unaware that the account is capable of much more than just saving cash.<\/p>\n\n\n\n

And that\u2019s no fault to their own; after all, the account name is a bit of a misnomer, since TFSAs can hold various types of investments as well.<\/p>\n\n\n\n

TFSAs<\/a> earn tax-free interest, which means that you can make more money on your money without paying tax.\u00a0<\/p>\n\n\n\n

Using a TFSA allows you to keep more money in your account, which means more money towards a down payment.<\/p>\n\n\n\n

Here are a few additional benefits that come with a TFSA:<\/p>\n\n\n\n