Begin Saving Early 

Start by looking at your monthly income and expenses and see where you can start putting money aside for a down payment. For many Islanders, this is a marathon, not a sprint, determine how much you can set aside towards a down payment each month and stick to a savings plan. You can also set up auto-savings to automatically put money into a savings account.     

Be Realistic About What You Can Afford 

When planning to buy a home, it is important to look at more than just the down payment. You’ll also need to consider ongoing costs like your monthly mortgage payment, utilities, property fire insurance, property taxes, and the general upkeep of your home. Start by running some numbers through a mortgage calculator to get an understanding of what you can afford. 

Be Aware of Your Financial Resources for Debt Obligations 

The amount you can afford to spend on a home really depends on your personal situation. One of our Financial Service Officers can meet with you to review your financial picture and provide advice on how much you can borrow. The amount you borrow is based on your income sources and the current debt obligations you already have, but you should also look at your own priorities and goals to see what mortgage amount you are comfortable with.  

Know about Programs You can Leverage 

There are several programs to help first-time homebuyers on PEI.  

• The Home Buyers Plan allows first time homebuyers to withdraw up to $60,000 from a Registered Retirement Savings Plan to buy or build a home. This can be paid back over 15 years to the RRSP without tax consequences.
  
  
• A First Home Savings Account allows first time home buyers to save to purchase or build a home while saving on taxes. The maximum amount that can be put into this account is $8,000 a year with a lifetime maximum of $40,000. Any money put into your First Home Savings Account is tax deductible – which means when you file your taxes, you will pay less on income tax. Money in a First Home Savings Account can be invested in several investment options, and the interest earned from this investment is also tax free. 

The Province of PEI also offers programs for first time homebuyers like the Down Payment Assistance Program.  

For more information on down payment requirements for a home, visit this website: 

https://www.canada.ca/en/financial-consumer-agency/services/mortgages/down-payment.html