How to Save for a House

If you’re a first-time buyer in Ottawa or anywhere in Ontario, “How do I actually save for a house?” is probably the question on repeat in your head. Prices, interest rates, rent, groceries. Everything feels expensive. The good news? With a clear plan, realistic timelines and the right tools, saving for a down payment is absolutely doable.

Let’s walk through how to save money for a house step-by-step, with a focus on Ottawa buyers.

1. Know Your Target: How Much Do You Need?

Before you start cutting lattes, you need a number.

In Canada, the minimum down payment on a house depends on the purchase price:

Up to $500,000 → 5% down.
Portion from $500,000 to $999,999 → 10% on that portion.
$1M and up → 20% down (no insured mortgage).

Example:
If you’re buying a $600,000 home in Ottawa:

5% of the first $500,000 = $25,000.
10% of the remaining $100,000 = $10,000.
Total minimum down payment = $35,000.

From there, add closing costs (usually 1.5–4% of the price in Ontario) and you’ve got your savings target.

Want to make the most of your home purchase? Check out these other blog posts next!

2. Start With a Realistic Timeline

Once you know how much you need, decide when you want to buy.

Let’s say you want $40,000 saved in four years:

$40,000 ÷ 48 months = $835 per month.

If that number feels impossible, don’t panic. You can:

Extend the timeline (five or six years instead of four).
Adjust the target price (maybe start with a condo or townhome).
Plan to combine savings with a partner or family member.

The key is turning “someday” into “here’s my monthly number.”

3. Treat Your Down Payment Like a Monthly Bill

Saving for a down payment works best when it’s automatic.

Open a separate high-interest savings account or FHSA and nickname it “House Fund”.
Set up an automatic transfer the day after payday.
Avoid mixing this money with everyday spending – Think out of sight, out of mind.

Many Ottawa buyers find success by directing:

Work bonuses
Tax refunds
Overtime or additional side hustle income

straight into the “House Fund” instead of their regular chequing.

4. Trim Smart, Not Miserable

You don’t have to live on instant noodles to buy a house, but you will need to make trade-offs.

Look at three big spending areas:

Housing – Could you take on a roommate, downsize or move slightly further from the core for a few years to lower rent? Even $200–$400/month extra into savings adds up fast.
Transportation – In Ottawa, car costs add up quickly (payments, insurance, gas, parking). Could you drive something cheaper, sell a second car or rely more on transit for a while?
Lifestyle – Instead of cutting everything, pick a few “non-negotiables” (gym, kids’ activities, one dinner out per month) and be intentional with the rest.

Remember: this is a temporary season with a clear goal.

5. Use the Tax Tools Available to You

This is where Canada gives first-time buyers a real advantage.

First Home Savings Account (FHSA)

The FHSA is designed specifically for saving for a house:

Contributions are tax-deductible (like an RRSP).
Growth is tax-free if used for a qualifying home purchase.
Withdrawals for that home are also tax-free.

For many first-time Ottawa buyers, maxing the FHSA each year is one of the most powerful strategies.

RRSP and the Home Buyers’ Plan

Can you use an RRSP to save for a house? Yes.

The Home Buyers’ Plan (HBP) allows eligible first-time buyers to:

Withdraw up to a government-set limit from their RRSP.
Use it towards their down payment.
Repay it over time (typically up to 15 years) without paying tax on the withdrawal, as long as you follow the rules.

This can be especially useful if you’ve been contributing to an RRSP through work or have an unused room.

Many buyers combine:

Personal savings in a high-interest account
FHSA contributions
RRSP funds via the Home Buyers’ Plan

to build a stronger down payment and keep more money in their own pocket, instead of paying CMHC premiums or interest over the long term.

Buying a house for the first time? Find more home-buying advice in these other blog posts.

6. Keep Your Credit (and Debt) in Check

Even if you’re focused on the saving side, lenders will also look at:

Your credit score
Your existing debts (credit cards, car loans, lines of credit)
Your income stability

While you’re saving:

Pay all bills on time, every time.
Aim to keep credit card balances well below the limits.
Avoid taking on new loans or big monthly payment obligations unless necessary.

Good credit doesn’t just help you get approved, it can also help you secure a better interest rate when you’re ready to buy.

7. Match Your Strategy to the Ottawa Market

Ottawa’s market can shift month to month but a few patterns typically repeat:

Spring often brings more listings and more competition.
Late fall and December can be a great time to buy – fewer buyers, motivated sellers and sometimes better negotiating room.
Certain neighbourhoods (like Orleans, Barrhaven, Kanata and parts of the downtown core) offer different price points and property types, which can affect how long you need to save.

Working with a local Realtor early (even a year or two before you’re ready) can help you:

Set a realistic purchase price based on your timeline.
Understand which areas fit both your budget and lifestyle.
Adjust your savings target as the market changes.

8. Check In and Adjust Along the Way

Your first savings plan won’t be perfect. Life happens, including promotions, job changes, kids and unexpected expenses.

Every 6–12 months:

Revisit your target purchase price.
Check your progress in the “House Fund.”
Adjust your monthly savings or timeline if needed.

The most important thing is that you stay in motion. Even if you need more time than you originally planned, you’ll still be far ahead of where you’d be if you hadn’t started.

Quick Tips

Figuring out how to save for a house in Ottawa can feel overwhelming, but it really comes down to a handful of smart moves:

Know your numbers and your timeline.
Automate your savings into a separate account or FHSA.
Use RRSP tools and tax advantages where it makes sense.
Make intentional, temporary lifestyle trade-offs.
Keep your credit strong and stay informed about the local market.

If you’d like help mapping out what this looks like for your specific budget and the neighbourhoods you’re interested in, a local Realtor can walk you through real numbers and options so your savings plan is aligned with the Ottawa market, not just a generic online calculator.

Ready to buy? Get in touch with us today, we’d love to help you find your place in the capital! Call 613.909.8100 or reach us by email at info@PilonGroup.com.