Saving for a home is one of the biggest financial goals most Canadians pursue. Whether you’re buying your first condo in Kelowna or upgrading to a family home in the Okanagan or beyond, getting your savings organized is key to making that dream a reality.
Here’s how to strategically divide your money across different savings accounts to stay on track toward your mortgage goals.
Your down payment is the foundation of your home-buying plan. Keeping it separate from your everyday accounts helps you stay focused and avoid dipping into it for other expenses.
The best account type for this is a high-interest savings account (HISA) with no monthly fees and easy online transfers. This fund can be for your down payment, closing costs, home inspection, and all the other expenses that come with buying a home.
Pro mortgage tip: Automate transfers from your paycheque so you’re consistently building your down payment. Don’t forget that even small, regular amounts add up fast.
There will always be financial surprises with homeownership, from a sudden bathroom repair to a furnace that gives out in January. That’s why an emergency fund is non-negotiable.
The best account type for these surprises is a separate savings account or a TFSA. This account should have 3-6 months of living expenses and shouldn’t be touched during the home-buying process.
This account matters because lenders will look at your overall financial stability. Having an emergency fund helps show that you’re prepared to manage your mortgage responsibly.
If you’re saving over a few years, a Tax-Free Savings Account (TFSA) can be a smart way to grow your money while keeping it accessible. Any interest or investment gains are tax-free, and withdrawals won’t impact your taxable income.
You can use your TFSA for part of your down payment or upcoming home-related costs, while earning more than a regular bank account typically offers.
The First Home Savings Account (FHSA) is one of the best new tools available for Canadians saving for a home. It combines the benefits of an RRSP and a TFSA to help first-time buyers save faster. Contributions are tax-deductible, and qualified withdrawals for your first home are tax-free. You can contribute up to $8,000 per year, to a lifetime maximum of $40,000.
Pro mortgage tip: If you qualify, open an FHSA as soon as possible. You can even combine it with the Home Buyers’ Plan (HBP) to maximize your down payment.
Life doesn’t stop while you’re saving for a mortgage. Birthdays, car repairs, and vacations still happen.
The best account type for your flex fund is a regular savings account linked to your chequing account. This handles short-term spending goals so your home fund stays untouched.
Pro mortgage tip: Label your accounts with motivating names like “Future Home,” “Emergency Fund,” or “Flex Savings.”
It’s a simple psychological trick that helps keep you on track.
Use budgeting apps like Mint, YNAB, or your bank’s own tools to track your savings across accounts. Watching your balances grow can keep you focused on your long-term goal. It’s essential to understand and know your own financial wealth.
A clear, well-divided savings plan makes it easier to qualify for a mortgage and manage homeownership costs comfortably once you move in.
Saving for a mortgage is about more than reaching a single number. It’s about building smart habits and financial stability that will help you long after you’ve moved into your new home.
By dividing your money across purposeful accounts, you can stay organized, confident, and ready when it’s time to start your mortgage journey. I’m here to help you understand your borrowing power and find the right mortgage for your goals.
Give me a call at 250-826-3111, apply on my website or contact me through my online contact form to start the process today.
Let’s get your application off the ground.
