No matter your age or stage of life, buying your first home is a major milestone. Many Canadians dream of it and work toward it for years, and it’s often the largest purchase you’ll ever make. So how much do you really need for a down payment on your first house or condo?
Homeownership is achievable with the right tools and planning. One recently introduced option is the first home savings account (FHSA), which allows Canadians to save up to $8,000 per year, to a lifetime maximum of $40,000, with tax-free growth and tax-free withdrawal when used to buy a qualifying home.
Using an FHSA for your down payment
An FHSA is a registered account launched by the federal government on April 1, 2023. It’s designed specifically to help first-time buyers save for a down payment while receiving tax benefits.
Who can open an FHSA?
To open an FHSA you must be a resident of Canada, at least 18 years old, and not turning 72 or older in the same calendar year. You must also be a first-time home buyer: that is, you must not have owned a qualifying home used as your principal residence during any part of the five calendar years before opening the account. If you’re married or in a common-law partnership, your spouse must meet the same restriction.
How much can you contribute to an FHSA?
You can contribute up to $8,000 to an FHSA each year and carry forward up to $8,000 of unused contribution room after the account is opened. The lifetime contribution limit is $40,000. While you can open more than one FHSA, total contributions across all accounts cannot exceed that lifetime limit.
FHSA contributions are tax-deductible, similar to RRSP contributions, which can reduce your taxable income for the year. However, unlike RRSPs—where contributions for a tax year can be made in the first 60 days of the following year—FHSA contributions for a given year must be made within that calendar year. Overcontributing to an FHSA will trigger penalties, so track contributions carefully and consider regular deposits to stay on track.
Can you combine the FHSA with other programs?
The FHSA can be used alongside other federal programs like the Home Buyers’ Plan and the Home Buyers’ Tax Credit. Treat these options as complementary tools to help you save more efficiently and reach your purchase goal sooner. The FHSA is a relatively new product and may not be offered by every provider immediately.
How far FHSA savings will take you depends on the region and price range you’re targeting. The minimum down payment you need varies by purchase price and location. To illustrate, here’s a look at the down payments required for five Canadian capital cities based on benchmark prices from late 2022.
What is the minimum down payment for a home in Canada?
A down payment is the upfront portion of the purchase price you pay when buying a home. The larger your down payment, the smaller your mortgage will be, which generally means lower monthly payments and less interest over the life of the loan.
Minimum down payment rules:
- For homes priced at $500,000 or less, the minimum down payment is 5% of the purchase price.
- For homes priced between $500,000 and $999,999, the minimum down payment is 5% of the first $500,000 plus 10% of the portion above $500,000.
- For homes priced at $1,000,000 or more, the minimum down payment is 20%.
If your down payment is less than 20%, you will generally be required to purchase mortgage loan insurance (mortgage default insurance), which increases your monthly carrying costs. Mortgage loan insurance is not available for properties priced at $1 million or more; those purchases already require a minimum 20% down payment.
How much do you need for a down payment in Canada?
Minimum down payment rules are the same nationwide, but housing prices differ significantly by city. The amount you’ll need to save depends largely on where you plan to buy. Below are benchmark prices for all dwelling types as of Dec. 31, 2022, and the corresponding minimum down payments for each city.
| City | Benchmark home price (all dwelling types) as of Dec. 31, 2022 | Min. 5% down (for homes ≤ $500,000) | Min. down payment (5% of first $500,000; 10% for portion above $500,000) | Min. 20% down (to avoid mortgage insurance; for ≥ $1,000,000) |
|---|---|---|---|---|
| Victoria, B.C. | $931,650 | n/a | $68,165 | $186,330 |
| Regina, Sask. | $321,642 | $16,082.10 | n/a | $64,328.40 |
| Winnipeg, Man. | $350,842 | $17,542.10 | n/a | $70,168.40 |
| Greater Toronto Area, Ont. | $1,195,950 | n/a | n/a | $239,190 |
| Fredericton, N.B. | $284,642 | $14,232.10 | n/a | $56,928.40 |
Victoria, British Columbia
Benchmark price: $931,650 (19% increase year-over-year)
Victoria offers natural beauty, employment and education opportunities, arts and cultural amenities, and a high quality of life. It is, however, one of the more expensive provincial capitals.
Down payment: At the benchmark price, the minimum down payment is $68,165. To avoid mortgage loan insurance, you would need at least $186,330.
Regina, Saskatchewan
Benchmark price: $321,642 (3% increase year-over-year)
Regina is an affordable capital with parks, sports and cultural facilities, plus post-secondary institutions—making it an attractive option for first-time buyers and families.
Down payment: At the benchmark price, the minimum down payment is $16,082.10. To avoid mortgage loan insurance, aim for $64,328.40.
Winnipeg, Manitoba
Benchmark price: $350,842 (7% increase year-over-year)
Winnipeg combines affordability with strong arts, sports and food scenes, and offers good value for buyers looking to enter the market.
Down payment: For the benchmark price, the minimum down payment is $17,542.10. To avoid mortgage loan insurance, the target is $70,168.40.
Greater Toronto Area (GTA), Ontario
Benchmark price: $1,195,950 (15% increase year-over-year)
The GTA provides many career and educational opportunities, cultural attractions and varied neighbourhoods. Higher prices mean larger down payments are required.
Down payment: Because the benchmark price exceeds $1 million, a 20% down payment is required—$239,190 at the 2022 benchmark.
Fredericton, New Brunswick
Benchmark price: $284,642 (20% increase year-over-year)
Fredericton blends affordability with a small-city feel and access to nature. It’s an appealing choice for buyers seeking lower entry costs while prices rise steadily.
Down payment: At the benchmark price, the minimum down payment is $14,232.10. To avoid mortgage loan insurance, plan for $56,928.40.
Minimum down payments can vary widely depending on location and home type. Once you choose a city and price range, use a down payment calculator to estimate what you’ll need and how an FHSA or other programs can help.
From savings to keys
Canadians now have more options than ever to save for a first home. With planning, disciplined saving and the right tools—like an FHSA, the Home Buyers’ Plan, and government credits—you can move steadily from saving money to closing a purchase. Professional guidance from mortgage brokers, accountants or financial advisors can help you navigate rules and timelines and tailor a plan that meets your goals.
More about real estate:
- Can a first-time home buyer have a mortgage co-signer?
- Where to Buy Real Estate in Canada 2023
- Every mortgage calculator you will ever need
- How capital gains tax works on the sale of a property
- Buying a second home: how it works in Canada
- Mortgage renewal calculator
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