Down Payment Guide
How much you need, where to save it, and the programs that can help you get there faster.
Minimum Down Payment in Canada
| Home Price | Minimum Down | Example |
|---|---|---|
| Up to $500,000 | 5% | $400K home = $20,000 |
| $500,001 – $1,499,999 | 5% on first $500K + 10% on rest | $700K home = $45,000 |
| $1,500,000+ | 20% | $1.5M home = $300,000 |
💡 The 20% Sweet Spot
If you can put down 20%, you avoid CMHC mortgage insurance entirely — saving you thousands. But don't delay buying for years just to hit 20%. Sometimes 5-10% down and getting into the market sooner makes more sense.
Best Places to Save Your Down Payment
FHSA (First Home Savings Account)
The single best tool for saving for your first home in Canada.
How it works:
- Contribute up to $8,000/year
- $40,000 lifetime limit
- Contributions are tax-deductible
- Withdrawals for first home are tax-free
- Unused room carries forward ($8K max)
Why it's the best:
- Tax deduction going in (like RRSP)
- Tax-free coming out (like TFSA)
- Best of both worlds
- No repayment required
#2 RRSP Home Buyers' Plan (HBP)
Withdraw from your RRSP tax-free for your first home.
- Withdraw up to $60,000 per person ($120,000 per couple)
- No tax on withdrawal
- Must repay over 15 years (starting year 2 after withdrawal)
- Missed repayments become taxable income
#3 TFSA
A flexible savings vehicle — not specifically for homes, but great for down payment savings.
- No tax deduction on contributions
- Withdrawals are tax-free
- No restrictions on what you use it for
- Contribution room is restored the following year
#4 High-Interest Savings Account (HISA)
For money you need within 1-2 years. Safe and accessible.
- Currently earning 3-5% at online banks
- CDIC insured up to $100,000
- No risk of losing your down payment
- Best for short-term savings (under 2 years)
The Ultimate Strategy: Stack Them All
For maximum down payment power, combine:
FHSA: $40,000
Tax-deductible in, tax-free out
RRSP HBP: $60,000
Tax-free withdrawal (must repay over 15 years)
TFSA: As much as you have
Tax-free withdrawal, no repayment
= $100,000+ toward your first home
Per person. A couple could combine for $200,000+
Down Payment Saving Timeline
How long to save $50,000 at different monthly savings rates:
| Monthly Savings | Time to $50K (at 4% return) |
|---|---|
| $500/month | ~7 years |
| $1,000/month | ~3.8 years |
| $1,500/month | ~2.7 years |
| $2,000/month | ~2 years |
Gifted Down Payments
Yes, you can receive a gifted down payment from an immediate family member (parents, grandparents, siblings). You'll need:
- A signed gift letter stating the money is a gift, not a loan
- Proof the money has been in your account for 90 days (some lenders require this)
- The gifter's bank statements showing the source of funds
Note: Canada has no gift tax, so neither you nor the gifter pays tax on the gift.