Plan to Buy Your First Home

Buying your first home doesn't take a miracle; it takes a plan.

Do you have dreams of owning a home but worry it's out of reach? Here we want to break down a few financial concepts to help you feel informed, empowered, and prepared.

Shifting Your Money Mindset: From Dream to Plan

First, let's talk about the dream of buying your first home. For many, as housing prices rise, this can start to feel completely out of reach. But here's where we need to shift our mindset: home ownership isn't just about having enough money, it's about creating a strategic plan and understanding that achieving what we truly want takes time and intention.

Thinking about wanting to own a home and worrying about home prices is often where the thought process stops, but when you run the numbers, buying a home can become more realistic than you originally thought. The key is moving from a scarcity mindset ("I'll never afford this") to an abundance mindset ("How can I make this work?").

Author's note: For the analysis below, I'm relying primarily on facts and figures from the Canadian market. The concepts and math still apply if you are in a different country, but you will want to validate any assumptions based on your country's mortgage rules.

Let's Run the Numbers!

Let's assume you want to purchase a condo, something to get you started in the market that will then hopefully appreciate, which you can parlay into a future purchase of a larger home. Let's say the purchase price of this condo is $450,000.

Now, you are not saving $450,000 - you are saving what you need for a down payment. So let's run the numbers to take the big number (purchase price), down to the specific number (down payment), down to the monthly savings number - breaking big goals into manageable milestones.

Breaking it Down

In Canada, you can do as little as 5% down with an Insured Mortgage (this is a mortgage that is insured by CMHC - the Canadian Mortgage and Housing Corporation). With 5% down, you will pay an insurance premium, which will be added to your mortgage. The good news is that you get into the market; the challenge is that you are now paying interest on that insurance premium. If you put down 20% or more, you do not need to have CMHC insurance.

Let's say you want to purchase your new home in 5 years. Here is how it looks to save the down payment for your first-owned home:

Purchase Price: $450,000

Down payment 5%: $22,500

• Savings per year: $4,500

• Savings per month: $375

  
  

Down payment 20%: $90,000

• Savings per year: $18,000

• Savings per month: $1,500

  
  

This is meant to illustrate the minimum down payment available and the target if you don't want to include CMHC insurance. You can also do somewhere between 5% and 20% and the insurance premium will be lower the higher your down payment. If you want to do 20% down but those numbers seem out of reach, you can choose to save for longer or find something with a lower purchase price. That said, 5% down with CMHC insurance is a great way to get into the market and start to build equity. Every month you pay your mortgage, you're building wealth.

The Cost of Home Ownership

The other side of this coin is of course, the mortgage payment and the costs of home ownership that you need to consider. Here is how we approach the calculations to consider how much it will cost to own your home and make sure that the property you choose is right for your financial situation.

IMPORTANT: These numbers are for illustrative purposes only and do not reflect actual quotes or statements of current rates. Please work with a licensed mortgage professional for any/all actual mortgage qualification and affordability.

Mortgage Scenario: 5% Down

• Mortgage: $427,500

• CMHC Mortgage insurance: $17,955 (CMHC Calculator)

• Total Mortgage: $444,600

• Interest rate: 4.5%

• Amortization: 30 years*

• Payments: Monthly**

• Monthly payment: $2,246.50

  
  

Mortgage Scenario: 20% Down

• Mortgage: $360,000

• Interest rate: 4.5%

• Amortization: 25 years*

• Payments: Monthly**

• Monthly payment: $1,992.50

  
  

*30-year amortization is only available on insured mortgages for first-time home buyers or on new build properties. A typical amortization, outside these criteria, is 25 years.

**You will pay less interest on your mortgage overall by having more frequent mortgage payments, such as semi-monthly or bi-weekly. You can even do weekly though for this, you will want to ensure you have strong cash flow.

Ownership Costs

So now that we know our monthly mortgage payment, here are a few other costs to consider (with amounts as a rough starting point - these can vary considerably):

• Property taxes: ~$100/month (varies by location and property)

• Strata fees: ~$150–$700+/month depending on amenities, building upkeep, and strata management (this monthly cost can be significant and is often overlooked)

• Home insurance: ~$100/month for condos

• Home maintenance/upkeep: ~$50/month for condos (more for detached homes). This amount will not likely be required every month, but you can put it aside each month so it's there when you need it.

Your Total Monthly Investment

To summarize, as you consider what you can afford, lay out your new home numbers:

Expense	Amount (5% down)	Amount (20% down)
Mortgage	$2,246.50	$1,992.50
Property Taxes	$100	$100
Strata	$250	$250
Home Insurance	$100	$100
Home Maintenance	$50	$50
Total	$2,746.50	$2,492.50

Making Sense of the Numbers

When you consider what you are currently paying in rent, these numbers may not be that much more than you currently pay. Or if it is higher, could it be close to your current rent + what you were saving for the down payment? Look at these numbers relative to your current budget and see what makes sense for you.

One of the key insights I want to call out here as well, is that while the 20% down payment requires more upfront savings, it results in only about $250 less per month in total costs. This gives you flexibility: you can enter the market sooner with 5% down and start building equity, or save longer for the larger down payment to reduce your long-term interest cost and monthly carrying costs.

I am not advocating for the minimum down payment in all situations, nor am I recommending home ownership as the only path forward. You need to go in eyes wide open and make a decision that fits your financial life. What I am trying to shed light on is that with growing worries about home ownership, it may not be as out of reach as you originally thought.

The Time will Pass Either Way

Home ownership, like savings & investing, is one of those things where the power of time is incredible. Time will march on and you will either have saved and have savings or you won't. Same with your mortgage - time will pass and you will either have paid off your mortgage or you won't. This is particularly important when you reach retirement and still have to pay rent or pay a mortgage, depending on the choices you make.

Getting into the market and committing to an amortization period, trying to avoid extending it to be able to afford more house, means that one day, you will be able to live mortgage-free. This is the benefit of saving now, buying that home, starting that mortgage, paying it off, and being free.

Moving Forward with Confidence

Home ownership is more than a financial transaction; it's part of your financial wellness journey. By understanding these numbers and approaching them with the right mindset, you're not just buying a home; you're:

• Building equity instead of paying someone else's mortgage through rent

• Creating stability for yourself and your family

• Developing financial discipline through regular savings and mortgage payments

• Investing in your future with an asset that historically appreciates over time

The path to home ownership might seem daunting at first glance but the difference between dreaming and achieving is taking that first step, whether it's opening a dedicated savings account for your down payment, meeting with a mortgage broker to understand your options, or simply committing to saving that first $375 per month.

Your home ownership journey is uniquely yours. Whether you choose the 5% or 20% down payment route (or somewhere in between), whether you buy that condo in five years or ten years, what matters is that you're making informed decisions aligned with your values and long-term financial wellness goals.

Start where you are. Use what you have. Do what you can. Your future self—the one holding those keys to your first home, will thank you for taking action today.

Remember: Financial wellness isn't about perfection; it's about progress. Every dollar saved, every financial lesson learned, and every step forward brings you closer to your goal of home ownership and long-term financial security.