Saving for a down payment remains the biggest hurdle for aspiring homeowners. The good news? With the right strategy and discipline, you can reach your down payment goal faster than you might think. This comprehensive guide covers every tool and tactic available to Canadian homebuyers in 2026.
Understanding Down Payment Requirements
Before you start saving, know exactly what you're aiming for. In Canada, minimum down payments are based on purchase price:
Important: While 5% is the minimum, putting down more has significant advantages—lower CMHC insurance premiums, smaller mortgage payments, and better rate options.
Government Programs to Maximize Your Savings
First Home Savings Account (FHSA)
The FHSA is the most powerful tool for first-time buyers in 2026:
- Contribution limit: $8,000 per year, $40,000 lifetime
- Tax treatment: Contributions are tax-deductible (like RRSP)
- Withdrawals: Tax-free when used for first home purchase
- Carry forward: Unused room carries forward to next year
Strategy tip: If you're 18 and planning to buy at 28, open an FHSA now. Even if you can't contribute much initially, you'll accumulate contribution room.
RRSP Home Buyers' Plan (HBP)
Withdraw from your RRSPs to fund your down payment:
- Maximum withdrawal: $35,000 per person ($70,000 for couples)
- Repayment: Must repay over 15 years (no interest)
- Eligibility: Must be first-time buyer (or not owned home in past 4 years)
Pro tip: You can use both FHSA and HBP together for a combined $75,000 per person in tax-advantaged down payment funds.
Ready to Start Your Journey?
Get pre-approved today to see exactly what you can afford. Knowing your budget makes your savings goal concrete and achievable.
Creative Savings Strategies That Work
1. Automate Everything
- Direct deposit split between checking and savings
- Separate "down payment" savings account (preferably high-interest)
- Round-up apps that save spare change
2. The 50/30/20 Budget Hack
3. Reduce Your Biggest Expense: Housing
- Move to a less expensive rental
- Get a roommate (even temporarily)
- Move in with family if possible
- House-sit or property-manage for reduced rent
4. Boost Your Income
- Side gigs dedicated entirely to down payment
- Negotiate a raise (even 5% compounds quickly)
- Sell unused items
- Tax refunds go straight to savings
Gift Funds: Rules and Requirements
- Signed gift letter confirming no repayment expected
- Proof of transfer from giftor's account
- Some lenders require giftor's bank statements
- Some lenders require minimum 5% from your own resources
- Some accept 100% gifted down payment
- Investment properties typically require own funds
Learn more in our detailed guide on gifted down payments from family.
Savings Timeline Examples
Scenario 1: First-Time Buyer, $600,000 Target
Goal: $35,000 down payment
| Monthly Savings | Time to Goal |
|---|---|
| $500 | 5.8 years |
| $1,000 | 2.9 years |
| $1,500 | 1.9 years |
| $2,000 | 1.5 years |
Scenario 2: Couple Buying Together
- $35,000 goal reached in 1.5 years
- Combined FHSA contribution room = $16,000/year
- Tax refunds boost savings further
FAQ
Q: How much should I save per month?
A: Divide your target by months. $40,000 in 3 years = about $1,100/month.
Q: Can I borrow my down payment?
A: Generally no, except through RRSP Home Buyers' Plan.
Q: Should I invest my down payment?
A: Short term: savings. Long term: conservative investments may be considered.
Q: What if I can’t save enough?
A: Expand area, buy smaller, co-buy, or save longer.
What's Next
Break your goal into monthly targets, leverage every tool available, and get pre-approved so you know exactly what you're working toward.
Start Your Savings Journey
Get pre-approved to know exactly what down payment you need. Our experts can help you create a personalized savings plan.
