I’ve spent 8 years saving for a home but feel further behind — and I have no retirement savings. Is it time to rethink my plan?

Imagine this hypothetical scenario: Brett is 40, lives in Hamilton, Ontario and has spent nearly a decade doing what many Canadians are told is the “right” thing to do, saving money for a home. He’s built up a down payment fund over eight years, cutting back where he could and staying disciplined.

But instead of feeling closer to his reaching goal, he feels stuck. Home prices have climbed, mortgage rates are higher and his savings don’t seem to stretch as far as they once did. At the same time, Brett realizes that by focusing so heavily on a down payment, he’s largely neglected his retirement savings.

Now he’s questioning his strategy. Should he have been investing instead of saving? Has chasing the home ownership dream actually set him back financially? And at this point in his life, does it make sense to keep pushing for a home — or rethink the goal altogether?

Saving — but still falling behind

Brett isn’t a high-income earner, but he loves his job and the city he lives in. Home prices where he’s based are high, so he’s been doing what many people are told is the responsible move: aggressively saving for a down payment.

He earns $58,000 a year. Even with the rising cost of living, Brett has managed to save roughly 15% of his income, aiming for a 20% down payment. A larger down payment reduces borrowing costs and, once it reaches 20%, eliminates the need for mortgage default insurance — a goal many buyers work toward.

The problem is timing. Over the years Brett has been saving, home prices have risen much faster than wages (1). According to the Canadian Real Estate Association (CREA), the national average home price has increased significantly over the past decade, with steeper gains witnessed in many urban and eastern markets (2). In several cities, benchmark prices now sit well above what single-income earners can reasonably afford.

After saving about $8,750 annually over the course of eight years, Brett now has $70,000 put away for a down payment. But with homes in his area selling for around $700,000, he would need to double that amount — $140,000 — to equal a 20% down payment. Despite years of discipline, he’s less than halfway there.

That’s where the frustration sets in. Brett looks at how much cash he’s accumulated — and how much housing prices have climbed — and he now wonders if saving alone was the right strategy. He also notices that by parking most of his money in low-risk savings, he’s missed out on potential investment growth and fallen behind on retirement savings.

Now he feels stuck at a crossroads: Does he keep saving for a home that increasingly feels out of reach, or rethink the plan entirely — including how much he prioritizes homeownership versus investing for long-term security.

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How much of my savings should I invest?

If you'll need your money in the short or medium term — like for a down payment — it usually doesn’t make sense to invest all of it in higher-risk assets like stocks.

It’s all based on your timeline. Investments tend to perform better over long periods, because they have time to recover from market swings and grow through compounding. When your goal is only a few years away, a market downturn could delay your plans or shrink your buying power (3).

That same logic applies to retirement planning. As Canadians approach their golden years, portfolios are typically shifted toward more stable assets. For shorter-term goals like buying a home, the window for recovery is even smaller.

That doesn’t mean everything has to sit in cash. Lower-risk options like high-interest savings accounts (HISAs), guaranteed investment certificates (GICs), money market funds or short-term Government of Canada treasury bills (4) can provide modest returns while helping protect your savings from inflation (5).

Keeping all your money in cash, as Brett has done, carries its own risk: Inflation slowly erodes purchasing power. A blended approach — holding most of your down payment in secure, liquid options while investing a smaller portion for growth — can make sense when your timeline is flexible (6).

If Brett ultimately decides not to buy a home, his situation changes. At age 40, and with a longer time horizon, he could shift more of his savings toward growth-oriented investments such as diversified ETFs inside a Tax-Free Savings Account (TFSA) or Registered Retirement Savings Plan (RRSP), which are better suited for meeting retirement goals.

The right balance between saving and investing depends on timeline, risk tolerance and priorities. Financial plans aren’t static — they should evolve as circumstances change.

Even if Brett isn’t ready to buy a home today, his discipline hasn’t been wasted. He’s built a solid base for next steps. Now comes making the decision on the next best move for that $60,000 that supports both near-term flexibility and long-term security — ideally with guidance from a qualified financial advisor who can help map out realistic options for home ownership or retirement.

Do you really have to give up on homeownership — or just change the plan?

For Brett, the frustration isn’t only about the numbers — it’s about feeling like eight years of effort hasn’t gotten him further ahead. But that doesn’t mean home ownership is off the table. It may simply mean the plan needs tweaking.

One common misconception is that you must save a 20% down payment to buy a home. In reality, the minimum down payment is 5% on the first $500,000 of a home’s price, plus 10% on the portion between $500,00 and $1.5 million. Homes priced at $1.5 million or more will require at least 20% down (7).

For most buyers, putting less than 20% down is allowed — but it comes with a trade-off: mandatory mortgage default insurance. Known as the Canada Mortgage and Housing Corporation (CMHC) insurance, it protects the lender in case you don’t pay, while adding to the overall mortgage cost (8).

That’s why many people aim for a 20% down payment. It lets you avoid insurance premiums to reduce your long-term costs. But aiming for 20% is different from needing 20%. For someone like Brett, who’s been diligently saving but watching prices run ahead of him, a smaller down payment could mean entering the market sooner — while continuing to invest for retirement at the same time.

It’s also worth questioning whether the original goal still fits today’s reality. Waiting longer, buying a smaller home, choosing a different area or prioritizing retirement savings for a few years doesn't mean giving up. It means recognizing that financial plans are changeable — they evolve as markets, incomes and personal goals shift.

Brett hasn’t failed at saving. He’s created flexibility, and that has given him options — even if those options look different than they did eight years ago.

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Bottom line

Brett’s story isn’t about failure — it’s about how quickly the opportunity for homeownership has shifted. Eight years of rigorous saving gave him options, even if it didn’t deliver the outcome he expected.

If you’re feeling stuck, revisit your assumptions: You may not need 20% down, and you don’t always have to choose between a home and retirement. Rebalancing your savings, adjusting timelines or buying differently can move you forward without undoing the progress you’ve made.

— with files from Melanie Huddart

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Coldwell Banker (1); Canadian Real Estate Association (2); Fidelity (3); Bank of Canada (4); Investment Planning Channel (5); Tembo (6); Government of Canada (7); Canada Mortgage and Housing Corporation (8)