Down Payment Requirements in Canada
| Home Price |
Minimum Down Payment |
Amount |
| Up to $500,000 |
5% |
$10,000-$25,000 |
| $500,001-$999,999 |
5% on first $500K + 10% on remainder |
$25,000-$74,999 |
| $1,000,000+ |
20% |
$200,000+ |
What $20,000 Down Gets You
| Down Payment |
Home Price |
CMHC Insurance |
Monthly Mortgage (~5% rate, 25yr) |
| $20,000 (5%) |
$400,000 |
$15,200 (4%) |
~$2,425 |
| $20,000 (10%) |
$200,000 |
$5,580 (3.1%) |
~$1,270 |
| $20,000 (20%) |
$100,000 |
$0 |
~$580 |
Savings Timeline: How Long to Save $20,000
| Monthly Savings |
Time to $20,000 |
FHSA Tax Refund Boost* |
| $500 |
40 months (3.3 years) |
+$1,200-$2,400/year |
| $750 |
27 months (2.2 years) |
+$1,200-$2,400/year |
| $1,000 |
20 months (1.7 years) |
+$1,200-$2,400/year |
| $1,500 |
14 months |
+$1,800-$3,600/year |
| $2,000 |
10 months |
+$2,400-$4,800/year |
Tax refund assumes 30-40% marginal rate on FHSA contributions, reinvested into savings.
Couple Saving Together
| Combined Monthly |
Time to $20,000 |
Time to $40,000 (each uses FHSA) |
| $1,500 |
14 months |
27 months |
| $2,000 |
10 months |
20 months |
| $3,000 |
7 months |
14 months |
Best Accounts for a Down Payment
| Account |
Tax Benefit |
Limit |
Best For |
| FHSA (First Home Savings Account) |
Tax-deductible contributions + tax-free growth + tax-free withdrawal |
$8,000/year, $40,000 lifetime |
First priority for first-time buyers |
| RRSP (Home Buyers’ Plan) |
Tax-deductible + tax-free withdrawal (must repay in 15 years) |
$60,000 withdrawal |
Second option, especially if FHSA maxed |
| TFSA |
Tax-free growth + tax-free withdrawal (no repayment) |
$7,000/year (2025) |
Flexible, no restrictions |
| High-interest savings account |
Interest taxable |
No limit |
Short-term savings, accessibility |
| GIC (1-2 year) |
Interest taxable (unless in registered) |
No limit |
If buying in 1-2 years at fixed rate |
Optimal Strategy: Stack the Accounts
| Priority |
Account |
Annual Contribution |
Tax Refund |
| 1st |
FHSA |
$8,000/year |
$2,400-$3,200 (30-40% rate) |
| 2nd |
RRSP (HBP) |
$8,000-$15,000/year |
$2,400-$6,000 |
| 3rd |
TFSA |
Remaining savings |
None (but tax-free growth) |
| Reinvest tax refunds |
FHSA or TFSA |
$3,000-$8,000/year |
Accelerates timeline |
Example: Saving $20K Using FHSA + Tax Refunds
| Year |
FHSA Contribution |
Tax Refund (30%) |
Total Saved (Cumulative) |
| Year 1 |
$8,000 |
$2,400 |
$10,400 |
| Year 2 |
$8,000 |
$2,400 |
$20,800 + interest |
You reach $20,000 in under 2 years while only setting aside $8,000/year from your budget, with tax refunds making up the rest.
Government Programs for First-Time Buyers
| Program |
Benefit |
Eligibility |
| FHSA |
Tax-deductible savings, tax-free withdrawal |
First-time buyer, Canadian resident, age 18+ |
| Home Buyers’ Plan (HBP) |
Withdraw up to $60,000 from RRSP tax-free |
First-time buyer |
| First-Time Home Buyer Tax Credit |
$1,500 non-refundable tax credit |
First-time buyer |
| GST/HST New Housing Rebate |
Rebate on new home purchase |
Buying new construction |
| First-Time Home Buyer Incentive |
Shared equity with CMHC (5-10% of price) |
Income under $120,000 |
| Land Transfer Tax Rebate (Ontario) |
Up to $4,000 rebate |
First-time buyer in Ontario |
| Property Transfer Tax Exemption (BC) |
Exempt up to $500,000 |
First-time buyer in BC |
Monthly Savings Plan ($20,000 in 18 Months)
| Month |
Action |
Amount |
Running Total |
| 1 |
Open FHSA + auto-transfer $667/mo |
$667 |
$667 |
| 2-6 |
Continue saving + cut expenses |
$667/mo |
$4,002 |
| 6 |
Tax refund from FHSA (partial year) |
+$1,200 |
$5,202 |
| 7-12 |
Continue monthly savings |
$667/mo |
$9,204 |
| 12 |
Year-end FHSA top-up from refund |
+$2,400 |
$11,604 |
| 13-18 |
Continue saving + year 2 refund |
$667/mo + $1,200 |
$20,006 |
Budget Adjustments to Save More
| Category |
Cut From |
Cut To |
Monthly Savings |
| Housing (roommate, downgrade) |
$1,800 |
$1,200 |
$600 |
| Dining out |
$400 |
$100 |
$300 |
| Groceries (meal prep) |
$600 |
$400 |
$200 |
| Transportation |
$500 |
$200 |
$300 |
| Subscriptions |
$100 |
$30 |
$70 |
| Shopping/clothing |
$200 |
$50 |
$150 |
| Total monthly savings freed |
|
|
$1,620 |
What Else You Need Besides the Down Payment
| Cost |
Amount |
When Due |
| Home inspection |
$400-$600 |
Before closing |
| Appraisal fee |
$300-$500 |
Before closing |
| Legal/notary fees |
$1,000-$2,500 |
At closing |
| Land transfer tax |
$0-$15,000+ (varies by province) |
At closing |
| Title insurance |
$200-$400 |
At closing |
| Moving costs |
$500-$3,000 |
After closing |
| Immediate home costs |
$2,000-$5,000 |
After move-in |
| Total closing costs (estimate) |
$5,000-$15,000 |
Plan for this on top of down payment |
Tips to Reach $20,000 Faster
| Strategy |
Impact |
| Open FHSA immediately (even if not buying soon) |
Start the contribution room clock; $8K/yr carries forward |
| Reinvest every tax refund |
Adds $2,000-$5,000/year |
| Automate biweekly savings |
Aligns with paycheques, removes temptation |
| Use a no-fee HISA for emergency fund |
Keep down payment separate |
| Take on a side hustle for 6-12 months |
$300-$800/month extra |
| Sell unused items |
$500-$2,000 one-time |
| Live with parents/roommates temporarily |
Save $500-$1,200/month on rent |
| Use cashback credit card for all spending |
$300-$600/year back |
| Bank every windfall (bonus, tax refund, gifts) |
$1,000-$5,000/year |
→ Back to: Personal Finance Guide