How to save for a mortgage deposit

Buying a house is one of the biggest decisions anyone will make in their lifetime. To do so one needs to build up enough money so that they can put down a deposit for a mortgage. One will need to have enough money saved up so that they can go to a Toronto mortgage broker and choose the best option that suits their needs. Rising house prices have meant that in order to purchase your first home you will need to put down more money than ever, often around the tens of thousands amount.

It is never too early to begin to save up for a deposit. Every little bit of money can make the difference and the bigger your deposit is the less risk the bank will consider you. This will give you a wider scope and cheaper option for mortgage deals. So putting away percentage of paycheques or investing in less risky stock options can help you in the long run and make the difference in a good mortgage deal and a not so good one.

There are other options that available for prospective home owners such as short term savings which include regular savings and easy access accounts; as well as medium to longer-term savings options which include cash ISA’s, fixed rate bonds, and current accounts. Regular savings accounts are well suited for people who are saving over as short period of time like a year. They require you to pay a certain amount of money ranging from 50-500 dollars over a 12-month term which you will typically not be able to make withdrawals. These accounts offer the best interest rates as you are agreeing to lock in your cash, but you will typically need to have a prior account with the bank. A long term option such as an individual savings account allows you to pay a lump sum of money at the beginning and then earn interest on them free from income tax. They are a good option if you have had a good start to building up your deposit.

Building up enough money is the first big hurdle to putting down a deposit on a mortgage. It can be a stressful time in trying to buy your first home. Let the Rakhi Madan Mortgage Agent relieve some of that stress for you by helping you to choose the mortgage rate that is most ideal for you needs.

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