If you're a first-time home buyer wondering how on Earth you'll come up with a down payment, you're in the right place. This blog post is dedicated to first-time buyers like you, offering seven practical strategies to help you find the money you need for a down payment on a house in the Okanagan, the Shuswap, or anywhere in British Columbia.

Understanding Down Payments

Let's start with the basics: What is a down payment? It's your initial investment in your future home, typically a percentage of the purchase price. In British Columbia, the minimum down payment when working with a bank starts at 5% for properties less than $500,000. For homes priced between $500,000 and $1 million, you need 5% of the first $500,000 and 10% of the balance. Homes priced over $1 million require a 20% down payment.

Seven Ways to Save for a Down Payment

1. RRSP Home Buyers' Plan (HBP)
The RRSP Home Buyers' Plan is an excellent option for first-time buyers. Canadian residents can withdraw up to $35,000 from their RRSPs tax-free to fund a down payment. If you're buying with a partner, they can also withdraw up to $35,000, giving you a potential $70,000 for your down payment. You have 15 years to repay the amount withdrawn, starting the second year after the withdrawal.

2. Gifts and Inheritance
If you have a generous family, this can be a game changer. A gift from a family member can significantly boost your down payment. This money needs to be documented properly to show lenders it’s a genuine gift, not a loan. If you receive an inheritance, it can also be used towards your down payment.

3. Secondary Income Opportunities
Consider taking on a second job or side gig to increase your savings. The Okanagan and Shuswap areas offer unique seasonal work opportunities in tourism, wineries, agriculture, and ski resorts. Any additional income can be funneled into your down payment fund or RRSPs.

4. Reduce Expenses
Cutting back on expenses can accelerate your savings. Create a budget and see where you can cut costs. Avoid eating out, reduce your utility bills, cancel subscriptions, and downgrade your cell phone plan. Every little bit counts towards your savings goal.

5. Downsize and Save
If you're currently renting a high-cost space, consider downsizing to a smaller, more affordable place. The money saved on rent can be added to your down payment fund. Alternatively, consider getting a roommate or moving in with family temporarily to save on living expenses.

6. Sell Unused Items
Look around your home for items you no longer need or use. Selling these items can provide a quick influx of cash that can be put towards your down payment. Platforms like eBay, Craigslist, and Facebook Marketplace are great for selling used goods.

7. Automate Your Savings
Set up an automatic transfer from your checking account to your savings account each month. Automating your savings makes it easier to consistently put money aside for your down payment without having to think about it.

Final Thoughts
While the journey to homeownership may seem daunting, especially with rising home prices, it is still possible with the right strategies and determination. By utilizing these seven methods, you can steadily save for your down payment and move closer to achieving your dream of owning a home.

I'm Lisa Salt with Remax Vernon Salt Fowler, and although my first house was purchased a long time ago, many of these strategies remain relevant today. The numbers may be larger, but the principles of saving and smart financial planning still apply. Don’t be discouraged by the high prices; with patience and effort, you can become a homeowner.

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About the Author: The article above, FIRST TIME Home Buyer's Guide: How to Raise a DOWN PAYMENT in BC | 2024 Strategies & Tips, was provided by Lisa Salt, an authority on Vernon BC and area real estate and a leader in the field of real estate blogging and vlogging.  Lisa and her group have helped literally helped thousands of families buy and sell homes since 1993. 

Looking to buy a home in the Vernon/North Okanagan area?  Check out "Everything You Need to Know About Buying a Home" article. It’s free of charge and will save you a ton of time!

Looking to sell?  We use the latest technology to get our clients’ homes sold quickly and for as much money as possible.

We help people buy and sell real estate in the following Okanagan/Shuswap areas: Vernon, Armstrong, Enderby, Lake Country, Lumby, Westside and Salmon Arm/Shuswap.

Call or Text 250-549-7258 or email webinfo@saltfowler.com