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How to Save for a Down Payment in Canada: Complete Guide (2026)

Updated

This page covers saving for a down payment: how much you need, what mortgage insurance costs if you put down less than 20%, the accounts that help (the FHSA, the RRSP Home Buyers’ Plan and the TFSA), and how long saving takes. The first-time buyer hub covers the rest of buying a first home, and the FHSA guide covers the account in detail.

The FHSA (First Home Savings Account) changed the math. Contributions of up to $8,000 a year ($40,000 lifetime) are deductible, so at a 30% marginal rate each full year’s contribution returns about $2,400 in tax, and growth and a qualifying withdrawal are tax-free. The table below shows five years of maximum contributions growing at an assumed 5% a year.

The minimum down payment is 5% on the first $500,000, but putting down less than 20% means paying mortgage default insurance: a one-time premium of 2.80% to 4.00% of the mortgage, usually added to the loan. On a $500,000 home with 5% down, that’s $19,000. Many buyers combine an FHSA, a TFSA and the RRSP Home Buyers’ Plan (up to $60,000 per person) to get closer to 20%, while weighing that against how prices move while they save.

How much down payment do you need?

Minimum down payment rules

Home priceMinimum down payment
Up to $500,0005%
$500,000 to under $1.5 million5% of the first $500,000 + 10% of the rest
$1.5 million or more20%

The $1.5 million limit applies since December 15, 2024 (it was $1 million). Source: FCAC, Down payment.

Example calculations

Home priceMinimum down payment20% down
$400,000$20,000$80,000
$600,000$35,000$120,000
$800,000$55,000$160,000
$1,000,000$75,000$200,000

Mortgage insurance premiums

Down paymentCMHC premium (25-year amortization)
5% to 9.99%4.00% of the mortgage
10% to 14.99%3.10%
15% to 19.99%2.80%
20% or moreNo insurance required

First-time buyers and buyers of new builds can choose a 30-year amortization, which adds 0.20 percentage points to the premium. Example: a $500,000 home with 5% down is a $475,000 mortgage; at 4.00%, the premium is $19,000, added to the mortgage.

Accounts for down payment savings

How they compare

AccountTax deductionTax-free growthTax-free withdrawalSuits
FHSAYesYesYes, for a qualifying first homeFirst-time buyers
TFSANoYesYesAnyone
RRSP (Home Buyers’ Plan)YesTax-deferredYes, but must be repaidBuyers with RRSP savings
High-interest savingsNoNoYesMoney needed soon
GICNoNoAt maturityMoney needed on a known date

FHSA (First Home Savings Account)

FeatureDetails
Annual contribution room$8,000
Lifetime limit$40,000
Tax deductionYes, like an RRSP
GrowthTax-free
WithdrawalTax-free for a qualifying first home

Example: five years of maximum FHSA contributions (contributions at the start of each year, 5% annual growth assumed, 30% marginal tax rate):

YearContributionTax refundBalance at year end
1$8,000$2,400$8,400
2$8,000$2,400$17,220
3$8,000$2,400$26,481
4$8,000$2,400$36,205
5$8,000$2,400$46,415

After five years: $40,000 contributed, about $6,415 of growth and $12,000 in tax refunds, about $58,415 toward a down payment if the refunds are saved too. Actual growth depends on the investments; a savings account or GIC earns less than 5% at today’s rates.

RRSP Home Buyers’ Plan (HBP)

FeatureDetails
Maximum withdrawal$60,000 per person ($120,000 for a couple)
RepaymentOver 15 years
First repayment yearNormally the 2nd year after the withdrawal; the 5th year for a first withdrawal made from 2022 to 2028
TaxNo tax on the withdrawal if repaid on schedule

The HBP and FHSA can both be used for the same home. More in the Home Buyers’ Plan guide.

TFSA

FeatureDetails
Contribution room$7,000 for 2026
GrowthTax-free
WithdrawalTax-free; the room returns the next calendar year

How long saving takes by city

This table assumes saving $800 a month, with no investment growth, toward the minimum down payment on a typical home in each city: the board’s benchmark price where it publishes one, otherwise an average. Boards release their figures on different days, so the month of each price is shown beside it:

CityTypical priceMinimum down paymentTime at $800/month
Regina$348,900 (benchmark, August 2026)$17,4451.8 years
Winnipeg$393,463 (average of all sales, August 2026)$19,6732.0 years
Edmonton$423,100 (benchmark, September 2026)$21,1552.2 years
Calgary$566,700 (benchmark, September 2026)$31,6703.3 years
Montreal (CMA)$683,074 (average, September 2026)$43,3074.5 years
Ottawa$637,700 (benchmark, August 2026)$38,7704.0 years
Toronto (GTA)$925,900 (benchmark, August 2026)$67,5907.0 years
Vancouver (Greater)$1,075,900 (benchmark, September 2026)$82,5908.6 years

None of these prices reaches $1.5 million, so the tiered 5%/10% minimum applies to all of them. Prices come from each city’s real estate board. Montreal’s and Winnipeg’s boards publish no all-homes average, so those two are each board’s dollar volume of sales divided by its number of sales; the housing market pages have the details.

20% down (no mortgage insurance)

City20% downTime at $800/month
Regina$69,7807.3 years
Winnipeg$78,6938.2 years
Edmonton$84,6208.8 years
Calgary$113,34011.8 years
Montreal (CMA)$136,61514.2 years
Ottawa$127,54013.3 years
Toronto (GTA)$185,18019.3 years
Vancouver (Greater)$215,18022.4 years

This is why many buyers in high-cost cities combine an FHSA, the Home Buyers’ Plan and a TFSA rather than saving 20% from income alone.

How long to save $20,000

Monthly savingsTime to $20,000FHSA tax refund (30% to 40% marginal rate)
$50040.0 months$1,800 to $2,400 a year
$75026.7 months$2,400 to $3,200 a year
$1,00020.0 months$2,400 to $3,200 a year
$1,50013.3 months$2,400 to $3,200 a year
$2,00010.0 months$2,400 to $3,200 a year

The refund applies to FHSA contributions, which are capped at $8,000 a year, so saving more than $667 a month doesn’t raise it. Details in is an FHSA worth opening.

A couple saving together

Each partner can open an FHSA, so a couple has twice the room.

Combined monthly savingsTime to $20,000Time to $40,000
$1,50013.3 months26.7 months
$2,00010.0 months20.0 months
$3,0006.7 months13.3 months

Savings strategies

How much to save each month

Target down paymentTimelineMonthly savings needed
$50,0003 years$1,389
$50,0005 years$833
$100,0005 years$1,667
$100,0007 years$1,190

These leave out investment growth and tax refunds, which reduce the monthly amount.

Ways to save faster

ApproachHow it helps
Automatic transfers on paydaySavings happen before spending
Saving tax refundsFHSA and RRSP refunds go back into the down payment fund
Lower housing cost while savingA roommate or cheaper rental frees up cash
Side incomeExtra income can go straight to savings
Fewer subscriptions and car costsSmall monthly savings add up
Employer RRSP matchAdds to RRSP savings usable through the HBP

Paying yourself first

  1. Set a monthly savings target.
  2. Set up an automatic transfer on payday.
  3. Fill the FHSA first (about $667 a month uses the full annual room).
  4. Put the rest in a TFSA.
  5. Budget with what’s left.

Where to keep the money

The shorter the timeline, the less room there is for the balance to fall right before you buy.

TimelineCommon choicesRisk
1 to 2 yearsHigh-interest savings, GICs (inside an FHSA or TFSA)Very low; the balance doesn’t fall
3 to 5 yearsGIC ladder, conservative or balanced ETFsLow to moderate; the balance can fall
5 years or moreBalanced or growth ETFsModerate to high; can fall sharply in a downturn

Stocks and equity funds can drop 20% or more in a year, which matters when the purchase date is fixed.

Government programs that help

ProgramBenefit
FHSATax-deductible contributions, tax-free growth and withdrawal
RRSP Home Buyers’ PlanWithdraw up to $60,000 tax-free, repaid over 15 years
First-Time Home Buyers’ Tax CreditA $10,000 amount (line 31270), worth $1,400 for 2026 at the 14% federal rate
Ontario land transfer tax refundUp to $4,000 for first-time buyers
GST/HST New Housing RebatePart of the GST or HST on a new home

Provincial programs include British Columbia’s first-time home buyers’ property transfer tax exemption, Ontario’s land transfer tax refund and Quebec’s refundable first-time buyer tax credit on the welcome tax. The first-time home buyer programs page covers each.

Down payment sources

What lenders accept

SourceNotes
Personal savingsThe standard source
FHSA withdrawalTax-free for a qualifying first home
RRSP Home Buyers’ PlanMust be repaid over 15 years
GiftWith a gift letter confirming no repayment
Sale of assetsWith documentation
InheritanceWith documentation
Borrowed fundsCMHC accepts non-traditional sources, including borrowed funds, only for 1- or 2-unit homes at 90.01% to 95% loan-to-value and strong credit; the loan counts toward your debt ratios

What lenders check

ItemWhat they look for
Source of fundsUsually about 90 days of bank statements
GiftsA signed gift letter
Large depositsAn explanation and paper trail

An action plan

  1. Work out a target price and the down payment it needs.
  2. Open an FHSA if you’re a first-time buyer.
  3. Set up automatic contributions.
  4. Use a TFSA for savings beyond the FHSA room.
  5. Claim the FHSA deduction and save the refund.
  6. Consider RRSP savings for the Home Buyers’ Plan.
  7. Track progress toward the goal.

House hacking: live in one unit, rent the rest

House hacking means buying a property with a rental component and using rental income to offset your mortgage.

Property TypeHow It WorksIncome Offset
Duplex or triplexLive in one unit, rent othersRent from the other units
Home with legal basement suiteRent the suiteRent from the suite
Rent by the roomRent spare bedrooms in your homeRent from roommates (lenders rarely count it)

Rents by city are in the rental market pages.

Qualification: lenders and mortgage insurers count part of the expected rent from a legal unit when calculating your debt ratios; the method varies (CMHC). For example, if a lender adds half of $1,400 a month in rent to your income, that supports about $39,000 more mortgage at a 6.99% qualifying rate and the 39% GDS limit.

Plexes (duplexes and triplexes) are especially common in Montreal and Quebec City.

Buying with a partner or friend

Buying with a friend, sibling or parent pools two incomes and two down payments.

Co-Buying ModelHow It WorksKey Consideration
Equal co-ownersSplit everything 50/50Clear co-ownership agreement is essential
Parent co-signsParent on title to help qualifyParent takes on legal liability; may affect their borrowing capacity
Parent gifts down paymentParent provides funds (not a loan)Lenders require a gift letter confirming no repayment expected
Sibling or friendPool resources for a shared homeExit strategy is critical — what happens if one wants to sell?

Critical step: Hire a real estate lawyer to draft a co-ownership agreement covering: contribution percentages, who pays what, what happens when someone wants out, and how to handle disagreements.

The bottom line

For a first-time buyer, the FHSA is the only account that gives a deduction going in and a tax-free withdrawal for the home, so it usually comes first; about $667 a month uses the full annual room. A TFSA holds savings beyond that, and the Home Buyers’ Plan adds RRSP savings. Money needed within a few years is usually kept in savings accounts or GICs. At purchase, the First-Time Home Buyers’ Tax Credit and any provincial land transfer tax refund reduce the cost further.

Sources

The figures and rules on this page come from these sources, last checked against them between August 29, 2026 and October 4, 2026. How we check facts.