5 Mantras To Know When You Are Saving For A Downpayment

5 Mantras To Know When You Are Saving For A Downpayment

by 5paisa Research Team Last Updated: Aug 24, 2023 - 06:29 pm 53.2k Views

5 Mantras To Know When You Are Saving For A Downpayment

1. Start Early: Most people start saving only a couple years before they decide that they want to buy a house. The key to making the saving process easier is to start early and allow your savings to grow before you ‘need’ to buy a house. This will allow you to go at a slower pace and save smaller amounts of money each month towards the same and not pressurize you into changing your lifestyle significantly or become a burden.

2. Budgeting: The first step is to sit down with your income and expenses and figure out in what range you could buy a house and what kind of down payment you could afford. It is essential to go over the expenses that you are currently incurring and see where you could cut down and save money. Set a realistic budget for the future and try to stick to it. Ensure that you put aside a portion of your income towards saving for the down payment each month.

3. Discipline yourself by automating your savings: If you are not the kind of person that could be disciplined about saving, then consider automating them. Decide how much you would like to save each month and set up an automated transfer of that amount to a savings account at the start of each month or start Systematic Investment Plan (SIP) in a mutual fund scheme of your choice. This will make saving and investing a habit.

4.  Make the most of your savings: Consider maximizing your savings by starting an SIP in an equity mutual fund. Since equities are best if you have an investment time frame of more than 5 years, it is always best that you start this as early as possible. An SIP will not only automate your savings and inculcate discipline, it will also help you reap the benefits of equity investing while smoothening some of the volatility associated with equity markets.

5. You also have to pay interest: When you are looking to buy a house, the down-payment is not the only thing you need to consider. You also need to consider the monthly instalments that you pay for your home loan. You must ensure that you always have savings in a liquid investment that can take care of at least one year of home loan instalments.

How do you rate this blog?


Start Investing in 5 mins*

Rs. 20 Flat Per Order | 0% Brokerage

About the Author

Our research team is composed of some highly qualified research professionals, their expertise range across sectors.

Open Free Demat Account
Resend OTP
Please Enter OTP
Account belongs to

By proceeding, you agree to the T&C.

Latest Blogs
Swing Trading Stocks: Week of 3 October 2023

Swing Trading Stocks for the Week

  • Sep 29, 2023
Weekly Outlook on Gold - 29 September 2023

Gold prices are facing sustained pressure despite a backdrop of dollar weakness, a rare occurrence that coincides with a decline in yields on US Treasuries. Typically, the strength of the dollar and higher yields have been key components of the Federal Reserve's hawkish monetary policy.

  • Sep 29, 2023
Weekly Market Outlook for 3 October to 6 October

The last week of September turned out to be volatile as the markets corrected during the monthly expiry to test the 19500 mark. We witnessed a strong recovery in Friday’s session, and the index finally ended the week above 19600, with marginally weekly loss.

  • Sep 29, 2023