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:
| Purchase Price | Minimum Down Payment | Example Amount | ---------------- | --------------------- | ---------------- | Up to $500,000 | 5% | $25,000 on $500K | $500,000 – $999,999 | 5% of first $500K + 10% of remainder | $50,000 on $750K | $1 million+ | 20% | $200,000 on $1M | 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 SavingsFirst Home Savings Account (FHSA)The FHSA is the most powerful tool for first-time buyers in 2026:
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:
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 Work1. Automate EverythingSet up automatic transfers on payday—before you can spend it:
2. The 50/30/20 Budget HackAdjust the traditional budget for aggressive saving: |
Category | Traditional | Aggressive Saver | ---------- | ------------- | ------------------ | Needs | 50% | 50% | Wants | 30% | 15% | Savings | 20% | 35% |
3. Reduce Your Biggest Expense: HousingTemporary sacrifices accelerate your timeline:
4. Boost Your Income
Gift Funds: Rules and RequirementsFamily gifts can supplement your savings, but there are rules: Requirements:
Lender policies vary:
Learn more in our detailed guide on gifted down payments from family. Savings Timeline ExamplesScenario 1: First-Time Buyer, $600,000 TargetGoal: $35,000 down payment (5% + 10% on remainder) |
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
Two people saving $1,000 each = $2,000/month
- $35,000 goal reached in 1.5 years
- Combined FHSA contribution room = $16,000/year
- Tax refunds from FHSA contributions boost savings further
FAQ
Q: How much should I save per month for a down payment?
A: Divide your target by your timeline in months. For $40,000 in 3 years: $40,000 ÷ 36 = ~$1,100/month. Adjust based on what's realistic for your budget.
Q: Can I borrow my down payment?
A: Generally no—lenders require the down payment to be from savings or gifts, not loans. The exception is the RRSP Home Buyers' Plan, which is technically a loan to yourself that you repay over 15 years.
Q: Should I invest my down payment savings?
A: For short timelines (under 3 years), keep funds in high-interest savings. For longer timelines, conservative investments may make sense, but you risk losing value when you need the funds.
Q: What if I can't save enough for the area I want?
A: Consider: (1) Expanding your search area, (2) Starting with a condo or smaller property, (3) Shared equity programs, (4) Saving longer, or (5) Co-buying with family.
What's Next
Don't let down payment savings feel overwhelming. Break it into monthly targets, leverage every tool available, and get pre-approved so you know exactly what you're working toward. Our team can help you create a realistic plan to achieve homeownership.
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.
