How Much Savings Should You Have Before Buying

 1. Down Payment

This is your biggest upfront cost.

• Typically 10%–20% of the home price

• Some loans allow lower, but higher = lower monthly payments

• Larger down payment can improve loan terms

Example:₱2,000,000 home → ₱200,000 to ₱400,000 down payment

🧾 2. Closing Costs

Often overlooked but required before you get the keys.

• Around 2%–5% of the home price

• Includes legal, processing, and registration fees

Example:₱2,000,000 home → ₱40,000 to ₱100,000

🛠️ 3. Emergency Fund (Non-Negotiable)

Don’t spend everything on the house.

• Keep 3–6 months of living expenses

• Covers job changes, emergencies, or repairs

Why it matters: Homeownership comes with unexpected costs.

🛋️ 4. Move-In and Setup Costs

Your home won’t feel complete on day one.

• Furniture and appliances

• Moving expenses

• Utility deposits and setup

Tip: Set aside a separate budget for this.

🔧 5. Maintenance Buffer

Things will break, it’s part of owning a home.

• Set aside 1%–3% of home value yearly

• Covers repairs, upkeep, and improvements

Example:₱2,000,000 home → ₱20,000 to ₱60,000 per year

📊 6. Simple Savings Formula

Here’s a quick way to estimate your total:

• Down Payment → 10%–20%

• Closing Costs → 2%–5%

• Emergency Fund → 3–6 months expenses

• Extra Buffer → Move-in + maintenance

Total Savings Needed≈(0.15×Home Price)+Emergency Fund\text{Total Savings Needed} \approx (0.15 \times \text{Home Price}) + \text{Emergency Fund}Total Savings Needed≈(0.15×Home Price)+Emergency Fund

💡 Final Thought

A good rule of thumb: you’re not ready when you can afford the house, you’re ready when you can afford everything around it.