Investing

Planning to buy a house in 5 years, where should I invest the money?

  • Last Updated:
  • Feb 5th, 2017 12:47 pm
Newbie
Oct 31, 2012
89 posts
18 upvotes
WATERLOO

Planning to buy a house in 5 years, where should I invest the money?

Not a big fan of debt so I'm hoping to put >50% down. What investment fund should I use for this chunk of money? Any fund recommendations?
3 replies
Member
Nov 30, 2015
221 posts
36 upvotes
Mississauga, ON
with295 wrote: Not a big fan of debt so I'm hoping to put >50% down. What investment fund should I use for this chunk of money? Any fund recommendations?
How much of the 50% do you already have? Buying a house now even with 20% will give you higher return over 5 years.

Back to your question. Assuming I have 50% dp of a house now but i want to wait 5 years, i would put 20% in a high interest savings account and invest the rest either in index funds or high quality dividend stocks. Its a calculated gamble because if by the time you want to buy a house your stocks were in the red you can still buy the house with the 20% and wait for your investments couple more years and then sell and use it as lump sum payment towards the mortgage.

Assumptions made:
1- You have 50% now or close to it
2- 50% dp now will be 50% dp 5 years from now ( not 25% and not 70%)
Deal Fanatic
Feb 15, 2006
9183 posts
3861 upvotes
Toronto
If you have RRSP room, put in there so they can grow tax free. Then take them out in the RRSP Homebuyer's arrangement (and you can put back in RRSP over future years).

Also max out TFSA(s), as money in there grow tax free. You can also withdraw, and later put back in.

If it's 2 years, then GIC or high interest savings account, but with 5 years, you can invest a bunch in equity. Can also invest with professional (fee based), especially if it's a large amount ($1M+).
Jr. Member
Feb 4, 2017
136 posts
36 upvotes
Arrgh wrote: If you have RRSP room, put in there so they can grow tax free. Then take them out in the RRSP Homebuyer's arrangement (and you can put back in RRSP over future years).
This. Assuming you qualify (i.e. first time home buyer)

Top

Thread Information

There is currently 1 user viewing this thread. (0 members and 1 guest)