{"id":19568,"date":"2022-07-18T09:00:00","date_gmt":"2022-07-18T13:00:00","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=19568"},"modified":"2022-07-11T11:02:31","modified_gmt":"2022-07-11T15:02:31","slug":"budget-for-down-payment","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/budget-for-down-payment\/","title":{"rendered":"How to Budget for a Down Payment"},"content":{"rendered":"\n

A down payment is generally required when seeking a mortgage and can cost a hefty price depending on your home value<\/span><\/strong><\/a>. To help ensure you\u2019ve got enough when you apply for a mortgage, you\u2019ll need to start saving early on. <\/p>\n\n\n\n

Read on to find out how to budget for a down payment. <\/p>\n\n\n\n

What Is a Down Payment? <\/strong><\/h2>\n\n\n\n

Down payments refer to an upfront sum of money issued towards the purchase of a home. The exact amount<\/span><\/strong><\/a> depends on the price of the home, the type of mortgage, the lender, and the buyer’s financial and credit profile. <\/p>\n\n\n\n

How Much Does A Down Payment Cost? <\/strong><\/h3>\n\n\n\n

Down payment requirements in Canada are as follows: <\/p>\n\n\n\n

Home Price<\/th>Minimum Down Payment Required<\/strong><\/th><\/tr><\/thead>
Up to $500,000 <\/td>5%<\/td><\/tr>
$500,000 – $999,999 <\/td>5% on the first $500,000; 10% on the remainder<\/td><\/tr>
$1 million+ <\/td>20%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Should You Save for Mortgage Default Insurance as Well? <\/strong><\/h2>\n\n\n\n

If you make a down payment of less than 20% of the purchase price of the home, you’ll need to pay mortgage default insurance.<\/span><\/strong><\/a> We recommend taking the time to save up and consider all associated costs. <\/p>\n\n\n\n

How to Budget for a Down Payment<\/strong><\/h3>\n\n\n\n

To budget for a down payment, there are certain actions you can take to help you keep more money in your pocket: <\/p>\n\n\n\n

Save and Invest Your Money <\/strong><\/h4>\n\n\n\n

High-Interest Savings Accounts <\/strong>– Rather than saving your money in a regular savings account, take advantage of a high-interest savings account. These accounts come with rates as high as 1.5% + and are typically offered by digital banks. <\/p>\n\n\n\n