Step 1 — Home Price & Down Payment Target

Target Home Price ($)

Target Down Payment (%)

$75,000 target

Minimum

On first $500K only. CMHC 4.00%

10%

Reduced CMHC

CMHC drops to 3.10%

20%

Conventional

No CMHC required

Step 2 — Down Payment Sources

Current FHSA Balance ($)

FHSA Rules (2025): Contribute up to $8,000/year, $40,000 lifetime max. Tax-deductible contributions. Qualifying withdrawals for your first home are completely tax-free and require no repayment. Unused room carries forward by $8,000/year from the date you opened the account. You can combine FHSA + HBP + TFSA for the same purchase.

Withdraw from RRSP — You ($)

Withdraw from RRSP — Partner ($)

HBP Rules (updated April 16, 2024): Max $60,000 per person (up from $35,000). Couples can withdraw up to $120,000 combined. Funds must be in your RRSP for at least 90 days before withdrawal. Repay 1/15th per year over 15 years (or it's added to taxable income). Withdrawals made 2022–2025 have a 5-year grace period before repayment begins.

TFSA Balance ($)

Other Savings / Gift ($)

TFSA withdrawals are tax-free with no restrictions on use. Gifts from immediate family members are accepted by most lenders as a traditional down payment source. Provide a gift letter confirming no repayment required.

Step 3 — Fill The Gap: Monthly Savings Plan

Monthly Savings Contribution ($)

Expected Annual Return (%)

HISA ~4–5%, GIC ~4–5.5%, balanced ETF ~6–7%. Use conservative rate for planning.

Down Payment Summary

Calculating

Down Payment Target

—

of purchase price

Total Available

—

all sources combined

Still Needed

—

to reach target

CMHC Premium

—

added to mortgage

Savings Progress

0% of target —

Total Down Payment Available—

Down Payment Target—

Still Needed—

CMHC Premium Tiers — Your Position

Time to Reach Target

First-Time Buyer Incentives (Canada)

FHSA and HBP limits current as of 2025. Verify your personal contribution room through CRA My Account before planning. Consult a financial advisor about the optimal mix of savings accounts for your tax situation. Savings timeline assumes consistent monthly contributions — actual results depend on account type and market returns.

How to Build a Canadian Down Payment Strategically

The most powerful tool available to Canadian first-time buyers is the First Home Savings Account (FHSA) — it offers a tax deduction on contributions AND tax-free withdrawals. That double tax benefit is unmatched by any other account. Open one as early as possible, even if you can't contribute much yet, because your annual room accumulates only from the date of opening.

Stack your FHSA with the RRSP Home Buyers' Plan ($60,000 per person) for maximum leverage. A couple can potentially pull $200,000 tax-free ($40K FHSA × 2 + $60K HBP × 2) without selling any investments. HBP funds are repaid over 15 years — it's essentially a 0% interest loan from yourself.

Open FHSA Immediately

Annual FHSA room ($8,000/yr) only accumulates from the date you open the account. Open it now even with $0 — your 2025 room is preserved for future contributions. Maximum lifetime room: $40,000 per person.

The 20% Sweet Spot

Getting to 20% down eliminates CMHC entirely, saving thousands in insurance premium. For a $750K home, 20% ($150K) vs 10% ($75K) saves roughly $6,975 in CMHC premium (2.8% of $249K extra mortgage). Run the numbers — it may be worth waiting.

90-Day RRSP Rule

Funds must be in your RRSP for 90 days before you can withdraw under the Home Buyers' Plan. Don't wait until you have an accepted offer — transfer the money 3+ months in advance. Locked-in RRSPs do not qualify for HBP.

Land Transfer Tax = Extra Cash

Your down payment is only part of what you need at closing. Land transfer tax (except AB and SK), legal fees (~$1,500–$2,500), title insurance, and adjustments require additional cash. Budget 1.5–4% of purchase price on top of your down payment for closing costs.

Down Payment FAQs

Canada's minimum down payment is 5% on the first $500,000 of the purchase price, plus 10% on any portion between $500,000 and $1,500,000. Homes over $1,500,000 require 20% down and are not eligible for CMHC mortgage insurance. Any down payment under 20% requires CMHC default insurance.

Yes. You can combine FHSA withdrawals (up to $40,000 lifetime, no repayment) with RRSP HBP withdrawals (up to $60,000 per person, repay in 15 years) for the same home purchase. A couple could access up to $200,000 combined. Both programs require you to be a first-time buyer (not having owned a home in the previous 4 years).

Yes, but with conditions. Most Canadian lenders accept gifts from immediate family members (parents, siblings) as a "traditional" down payment source. You'll need a signed gift letter confirming the funds are a true gift with no repayment required. Gifts from friends or non-family sources are considered "non-traditional" and may result in a higher CMHC premium rate for the 90–95% LTV tier.

Saving 20% eliminates the CMHC mortgage default insurance premium entirely (which is 2.8–4.0% of your mortgage). For a $750,000 home, moving from 10% to 20% down saves approximately $6,975–$8,680 in CMHC premium that would otherwise be added to your mortgage. However, the opportunity cost of the additional savings must also be considered — use this calculator to compare scenarios.

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