Saving for your first home can feel like trying to fill a bucket without knowing how big the bucket needs to be.
You might be putting money aside every payday, wondering whether you need 20% down, or trying to decide between paying off debt and building your savings.
Before you set a savings target, it helps to understand what you’re saving for.
Whether you’re hoping to buy in Lacombe, Red Deer, Blackfalds or a smaller Central Alberta community, here’s a practical place to start.
1. Start with a monthly payment you could live with
A home’s purchase price is only one part of the picture.
Think about what you could comfortably spend each month while still covering groceries, transportation, childcare, savings and the things that matter to your family.
Homeownership also brings expenses beyond the mortgage payment: property taxes, insurance, utilities, maintenance and possibly condo fees.
If you’re considering a rural property, leave room to investigate costs such as well and septic maintenance.
A mortgage conversation early in the process can help connect your savings goal with your income, debts and plans. You don’t need to wait until your down payment is complete to ask questions.
2. Understand the minimum down payment
You may not need 20% down to buy your first home.
For eligible purchases, Canada’s minimum down payment is:
$500,000 or less: 5% of the purchase price.
More than $500,000 but less than $1.5 million: 5% on the first $500,000, plus 10% on the remaining amount.
$1.5 million or more: 20%.
For example, a hypothetical $350,000 purchase would have a minimum down payment of $17,500. This is a calculation example, not a local price estimate or confirmation of mortgage eligibility.
With less than 20% down, mortgage default insurance is generally required. It protects the lender if you cannot repay the mortgage. Your circumstances and the property can affect the requirements. Source: Financial Consumer Agency of Canada
3. Give closing costs their own savings target
Your down payment needs some company.
You’ll also need money for costs associated with completing the purchase. These may include legal fees, a home inspection, property tax adjustments and other expenses specific to the property and transaction.
Ask for estimates early so these costs become part of your plan. Some expenses arrive before possession day.
Keep moving costs and an emergency cushion in mind, too. Using every available dollar to get the keys can leave little breathing room for a repair or an unexpected bill. Source: Financial Consumer Agency of Canada
4. Learn which savings accounts and programs may fit
A First Home Savings Account, or FHSA, is worth learning about if you’re eligible.
In the year you open your first FHSA, your participation room is $8,000. Contributions are generally tax-deductible, and qualifying withdrawals are tax-free. Eligibility, contribution and withdrawal conditions apply, so check your available room before contributing. Source: Canada Revenue Agency
If you already have RRSP savings, the Home Buyers’ Plan may also be relevant. Eligible participants can withdraw up to $60,000, subject to the program’s conditions and repayment rules. It can be used alongside a qualifying FHSA withdrawal for the same home when all conditions are met. Source: Canada Revenue Agency
These options work differently. Ask your financial institution or tax adviser how they fit your situation before moving money.
5. Turn the goal into a payday habit
Once you have a working target, break it into smaller amounts.
For illustration, setting aside $200 every two weeks adds up to $5,200 over 26 deposits, before interest or investment changes.
That doesn’t mean $200 is the right amount for everyone. Choose an amount that leaves enough for your regular expenses.
An automatic transfer can make saving easier to repeat. If your income varies, you might choose a smaller regular transfer and add extra when cash flow allows.
Review the plan every few months. A workable savings habit should be able to adjust when life changes.
6. Look at debt alongside savings
If you’re carrying debt, deciding where your next dollar should go can be tricky.
Debt payments affect your monthly budget and are part of a mortgage assessment. Putting everything into savings while expensive debt keeps growing may make your plan harder to maintain.
You may need a balance between debt repayment and saving. Looking at both together can help you choose a useful next step.
A few common questions
Should I wait until I have 20% down?
You don’t necessarily have to. Compare the requirements, borrowing costs and effect on your remaining savings before deciding what fits.
Can I start planning if buying is still a few years away?
Yes. More time gives you room to understand your budget, review your credit and build a savings routine.
What should I do first?
Write down what you’ve saved, your regular debt payments and a monthly housing budget that feels manageable. Those three numbers are a useful starting point.
You don’t need to have every answer today. A clear next step can make the goal feel much more manageable.
If you’re saving for your first home in Central Alberta, let’s talk about where you’re starting and what you’d like to work toward.
Tara Nevers
Prairie Key Mortgages | Mortgage Architects
403-877-6995
tara@prairiekeymortgages.com
www.prairiekeymortgages.com
General education only. Mortgage eligibility and program availability depend on individual circumstances and applicable requirements.
Written by Tara Nevers, Mortgage Broker with Prairie Key Mortgages, proudly helping families across Bentley, Lacombe, Ponoka, Rimbey, Sylvan Lake, Blackfalds, Red Deer, and Central Alberta.
