HSBC: Saving Money To Become A Homeowner

March 23, 2015

[Advice column by HSBC Bermuda]

I want to buy a home sooner rather than later. How should I go about saving for the down payment? Also, are there other expenses I need to consider?

The key to building your savings is to start saving as much as you can as soon as possible. The more you save now, the more you will benefit when you’re ready to buy a home. If you can, prepare to pay a larger down payment, it will reduce the size of your monthly payments and the long term interest paid on your mortgage.

Determine how much you need

Typically you will need to have 20% of the purchase price [or the current appraised value] available as a down payment for your home. However, be sure to speak with your bank who should be able to assist with determining your down payment requirements based on your personal circumstances.

In addition to your down payment, you will have to consider closing costs, including legal fees and stamp duty, which vary depending on the purchase price of your home.

Start saving now

Once you have an understanding of how much you need , you should develop a financial plan* to start your savings. Here are a few steps to determine how much you need to save per month.

  • 1. Determine how long you have to reach your savings goal
  • 2. Start working backwards by calculating the number of months and then by weeks to equate how much you need to set aside on a weekly basis to reach your goal
  • 3. Make sure that weekly figure works within your current budget
  • 4. If this figure isn’t realistic consider reducing your current spending by limiting luxuries and shop around to insure that you are paying the best price for major and everyday expenses [gas, groceries, insurance]. You can also consider saving a smaller amount over a longer period of time
  • 5. Select the savings option that best fits your needs and timeline

Short term options

Fixed term deposits:

  • Fixed Term Deposit Accounts offer you flexibility at competitive interest rates higher than a savings account. With a Fixed Term Deposit, you get the option of a low risk savings solution with maximised interest earnings to help your money grow faster

Medium – long term options


  • Most first time home buyers need to save for several years in order to build up the deposit they will need. Want to make your money work harder? You can look to invest your funds with the intent to receive greater returns than savings accounts.

Free Financial Planning with HSBC

HSBC can help you develop your own financial plan! Our approach takes you through the complete financial planning process, at no cost to you. We’ll work with you to understand your particular circumstances and your financial ambitions. From there, we provide you with solutions on how to manage, grow and protect your savings to achieve your goals.

To make a free Financial Planning appointment visit or by calling 299-5959.

Investors should be aware that performance returns are affected by market fluctuations. Investing entails risks, including possible loss of principal. Issued by HSBC Bank Bermuda Limited which is licensed to conduct Banking and Investment Business by the Bermuda Monetary Authority

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