Buying a home is one of the biggest financial decisions most Canadians will ever make. With rising housing prices, it’s tempting to stretch your savings to make that dream a reality. Many hopeful buyers ask, “Should I put every dollar I have toward my down payment to lower my mortgage?”
While it might seem like a smart move to reduce your loan amount and monthly payments, emptying your savings account can leave you financially vulnerable.
As a mortgage broker, I often advise clients to take a balanced approach: yes, aim for a healthy down payment, but don’t forget to protect your financial safety net. Here’s why having an emergency fund after you buy is just as important as saving up for your home.
An emergency fund is a dedicated pool of savings meant to cover unexpected expenses like job loss, medical bills, car repairs, or home maintenance. Financial experts typically recommend setting aside three to six months’ worth of living expenses. For homeowners, this becomes even more critical because you’re now responsible for everything that comes with the property, from a leaky roof to a broken furnace.
Without a financial cushion, any unplanned expense can lead to debt, missed mortgage payments or even the risk of foreclosure.
Many first-time buyers focus only on the purchase price and mortgage payments. But homes come with ongoing and sometimes surprise costs, such as:
Even a modest emergency, like a $2,500 furnace replacement, can become a major financial burden if you’ve spent your last dollar on closing day.
Let’s say you have $50,000 saved. Rather than putting every cent into your down payment, it may make more sense to put $40,000 down and keep $10,000 in reserve. While a smaller down payment might slightly increase your mortgage, the peace of mind that comes with financial flexibility is often worth it.
Working with a mortgage broker, like me, can help you find the right mortgage product that fits your financial situation without draining your savings. We can run the numbers, look at your overall financial picture, and explore all of the different mortgage programs available to you.
Buying a home is a huge milestone… but it shouldn’t come at the cost of your financial stability. Keeping an emergency fund post-purchase is one of the smartest moves you can make as a new homeowner. When you contact me, I will help you make decisions that support your long-term financial health. Have questions about how to balance your down payment with your emergency savings? Let’s chat and build a mortgage plan that works for you. 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.
