How to Budget Properly and Save Efficiently for a Mortgage

By Caitlin in Mortgage
How to Budget Properly and Save Efficiently for a Mortgage

Deciding to become a first-time homeowner is a huge and expensive step, one that needs to be properly planned and saved for. Starting the saving process to buy a house can be just as hard as choosing the house you want to buy. Not only will you need to save for a down payment on your dream home you’ll need to save for all the extra costs that come along with being a homeowner, including taxes, insurance and maintenance.

So you want to know how to stop spending your money and start saving it? Here are some top tips on how to cut your budget, spend less and save more.

What is the best way to start saving for the down payment on a mortgage?

Sit down with your significant other and decide how much you’re willing to spend on a house, from this number you should be able to determine how much you will need to save. You should start putting, into a saving account, a certain amount of money each time you get paid. Just remember that the more you put away each paycheque the quicker you’ll save, think about this when you want to buy something expensive or go on a trip. Are these things more important than being a homeowner to you?

Is there one major expense I can cut to help save more money for my down payment?

Cable and satellite television are huge unnecessary expenses that can easily be cut. Look over your monthly bill and see how much you’re spending and compare it to how much you’re actually watching television. You could be saving upwards of a $1000 every year and especially now with cheaper entertainment options like Netflix you probably won’t even miss your cable or satellite.

How can I budget better?

The best way to budget is to actually make a budget and use it. It’s easy to say you’ll try to keep better track of your money and that you’ll try to curb your spending habits but if you don’t write it down and review it you’ll never succeed. Once you start writing down and adding up all your spending you’ll probably be shocked at how much money you waste on useless unnecessary things. It might be hard to see in writing that you spend hundreds of dollars a month on expensive coffees, takeout food and after work drinks but you need to see it to be able to fix and manage it. Make a budget, divide your spending into categories, write it down and stick to it.

How do I determine how much I can afford to spend on a house?

Everyone’s situation is different so it really is completely up to you, your income and how much you can save. The best piece of advice is to live within your means. While it’s very difficult to buy a house you really can’t afford you don’t have to buy a $400,000 just because you were approved for a $400,000 mortgage. Think about the future and the stability of your income and settle on practical price that you won’t regret later.

Who should I get advice from when it comes to what kind of a house I can afford?

This is your money, your future and your house so you shouldn’t take any advice from people who do not understand your financial situation. Of course your real estate agent and the bank you’re getting your mortgage from will have lots of good advice to give you and you should listen to them. But when it comes to how much you want to spend on your house you really should listen to yourself. If you have a substantial savings your bank might suggest that you use all of it to put a big down payment on an expensive house, if this is not what you want, do not do it. Instead choose an affordable house and use only part of your savings as a down payment, that way you’ll have some money left over for those new homeowner expenses.

Are there any good financial books I can read to help me stay on track?

Most financial books say the same things over and over again so don’t waste your money buying a lot of them. Instead pick one or two that pertain to your personal situation. If you’re single and want to start saving for a house on your own then choose a book that talks about single income homes that way you’ll relate more to what the author is saying.

Is there a good app I can use to help me keep trap of my budget?

Handwallet, Mint and Level Money are all great budgeting apps. You can also download your specific bank’s app which you can do more with than simply keep track of your spending.

Should I have an emergency fund?

Being a homeowner is very expensive and there are always unforeseen costs when buying a house, especially if you are buying an older house. Having an emergency fund for these expenses is one of the smartest things you can do financially when buying a house. You should also hire the proper inspectors to make sure that there are as few surprises as possible. An emergency fund is your best bet to alleviate some of the unnecessary stress that comes with being a homeowner.

The best thing you can do when buying a house is to educate yourself as much as possible. Have a good hold on your own financial situation and be prepared for the unexpected.

For more information, check out our mortgage learning section.


All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster.

Loans Canada and its partners will never ask you for an upfront deposit, upfront fees or upfront insurance payments on a loan. To protect yourself, read more on this topic here.