The basics
A down payment rarely comes from a single source. This guide explains how to set a savings target, review your spending, increase what comes in and make saving automatic. It also covers the First Home Savings Account (FHSA), the Home Buyers' Plan (HBP), help from family, and the costs to plan for beyond the down payment.
How much do you need to save?
For many first-time buyers, the down payment is the hardest part of buying a home. Even the minimum can run to tens of thousands of dollars, and building it often takes several years. Before deciding how to save, it helps to know your target.
In Canada, the minimum down payment depends on the purchase price. On a $700,000 home, for example, the minimum is $45,000: 5% of the first $500,000 ($25,000) plus 10% of the remaining $200,000 ($20,000). Our guide Understanding a Mortgage explains the full rules and how mortgage loan insurance works.
The minimum does not have to be your personal target. You may decide to save more so you borrow less, reduce mortgage loan insurance costs, or keep your future payments more comfortable.
Not sure what purchase price fits your budget? Use the AdvaEqs Mortgage Affordability Calculator to estimate how much home you may be able to afford based on your income, expenses, down payment and current mortgage rates.
The down payment is also not the only money you will need. Closing and moving costs are covered later in this guide.
There is no single way to reach your goal. You can set aside part of your income, cut some expenses, use programs for first-time buyers, draw on money you have already saved, get help from family, or combine several of these. The first step is to understand where you stand today.
Start by knowing your numbers
It is hard to improve a number you have never looked at. Before trying to save more, find out where your money goes today.
Group your spending into categories that reflect your life, such as:
Housing
Groceries
Restaurants and takeout
Transportation
Utilities and insurance
Subscriptions
Entertainment and shopping
Travel
Personal and family expenses
Then review what you actually spent in each category over the last few months. Patterns often appear that individual purchases hide. Restaurants may cost more than you thought, a handful of small subscriptions may add up, or some expenses may have crept up over time.
Once you know your current numbers, you can ask a more useful question: can this category be improved, and if so, by how much?
The goal is not to give up everything you enjoy. It is to understand your spending and decide where your money matters most to you.
Look for places to spend less
Dining out is a good example of a category you can often reduce without giving it up completely.
Start by checking how much you currently spend on restaurants, takeout and other meals bought outside the home. Then consider whether that amount can come down. If you normally eat out four times a week, you might try two, and keep restaurant visits for the meals you really look forward to.
Cooking more at home also gives you more control over the ingredients, portions and cost of your meals. Two habits can lower your grocery bill further:
Plan your meals before you write the list. Decide what you want to cook during the week, then list the ingredients you need. This helps reduce impulse purchases and food waste, and makes better use of the groceries you already have.
Plan your shopping around sales. Websites and apps such as Flipp let you compare flyers before you go to the store, so you can choose where to buy and stock up on items you already need when they cost less.
The aim is not simply to spend less. It is to spend less and still enjoy your meals, perhaps even more than before.
If reducing restaurant and takeout spending saves $250 a month, and careful grocery shopping saves another $100 a month, that is $4,200 a year toward your home. Small changes across several categories can add up.
Look at both sides of the equation
Saving more does not always mean spending less. You can also look for ways to increase the money coming in. Depending on your situation, this could include:
Overtime or additional work
Freelance or consulting projects
Selling items you no longer need
Putting bonuses toward your down payment
Directing tax refunds and other unexpected money into your home savings
For example, if you can save an additional $300 a month and put an extra $2,000 from a bonus or refund toward your goal once a year, that adds $5,600 to your savings in one year.
Make saving automatic
Once you know what you can free up, treat your down payment like any other regular financial commitment. A large goal becomes easier to manage when you divide it into monthly amounts. For a $60,000 goal:
Monthly savings | Approximate time to reach $60,000 |
$500 | 10 years |
$1,000 | 5 years |
$1,500 | 3 years, 4 months |
$2,000 | 2 years, 6 months |
These figures do not include interest or investment returns.
You can arrange an automatic transfer to your savings account after each paycheque. Saving then becomes part of your routine instead of something you decide at the end of every month.
To choose an amount, compare your regular income with your fixed and variable expenses. Pick a transfer that will not put unnecessary pressure on your monthly budget.
Use the programs available to you
Once you know how much you can save, look at the accounts and programs designed to help you build a down payment. For eligible buyers, the FHSA and the HBP can generally be used together for the same home.
First Home Savings Account (FHSA)
The FHSA was created specifically to help eligible first-time buyers save for a qualifying home.
When you open your first FHSA, you generally receive $8,000 of contribution room, with a lifetime contribution limit of $40,000. You can carry forward up to $8,000 of unused participation room, so depending on your previous contributions, you may be able to contribute more than $8,000 in a later year. Contributions can generally be deducted from your taxable income, and qualifying withdrawals to buy your first home are tax-free.
FHSA contribution room starts accumulating only once you open your first FHSA. If you are eligible and expect to buy a home in the future, opening the account early can be useful even if you cannot contribute the full amount right away. If you are buying with a partner, each eligible person can have their own FHSA.
The FHSA has specific eligibility and contribution rules, so check the current Government of Canada rules before deciding how to use the account.
Home Buyers' Plan (HBP)
If you already have money saved in an RRSP, the federal Home Buyers' Plan may let you use some of it toward a qualifying home purchase. The current withdrawal limit is $60,000 for an eligible individual.
This is not free money. Amounts withdrawn under the HBP generally have to be repaid to your RRSP over 15 years. When repayments begin can depend on when you made the withdrawal, so check the current CRA rules to understand when yours will start and how much you will need to repay each year.
The HBP can give you access to money for your purchase now, but it also creates a future obligation that your budget will need to absorb.
Regular savings, TFSAs and GICs
Not every dollar has to come from a home-buying program. You can also use regular savings or a Tax-Free Savings Account (TFSA), which offers flexibility because eligible withdrawals are generally tax-free. High-interest savings accounts and GICs may also be options, depending on your circumstances and how soon you expect to need the money.
The right place for your savings depends on your timeline. If you plan to buy soon, protecting what you have already saved may matter more than earning a higher return while taking on more risk. This money has one job: helping you buy your home.
If you are deciding between keeping your down payment in a savings account or locking some of it into a GIC, see HISA vs. GIC: Which Is Right for Your Savings?
See what down-payment savings can earn today
Rates change over time. These leading Canadian-dollar savings and GIC rates are updated from rates tracked by AdvaEqs.
If you are saving for a home, make sure any GIC you choose matures before you expect to need the money.
Want to see what your savings could earn? Use the GIC Calculator to estimate interest and value at maturity using today's rates.
Keep your emergency fund separate. Using all of your savings for the down payment can leave you exposed to an unexpected expense after you move in.
Contribution limits and program rules can change. The figures above are current as of 2026; check the Government of Canada's website before making financial decisions.
Consider help from family
For some buyers, family members may be able to help with the down payment, either as a financial gift or as a loan.
If family help is part of your plan, agree on the arrangement clearly and check what documentation your lender requires. A lender may need to verify where the down payment is coming from and whether the money is a gift or a loan. Planning this in advance can make the mortgage process easier.
Combine several sources
Your down payment does not have to come from one place. Someone building an $80,000 down payment might combine:
Source | Amount |
FHSA | $30,000 |
RRSP withdrawal under the Home Buyers' Plan | $20,000 |
Regular savings | $20,000 |
Family gift | $10,000 |
Total | $80,000 |
The exact combination will be different for every person, and each source has its own rules and requirements. Building a down payment is often a matter of putting several pieces together rather than finding one large sum.
Plan for more than the down payment
Saving exactly your down payment does not necessarily mean you have enough money to buy a home. Buying a home also involves closing costs, moving expenses, immediate repairs, furniture and other costs of settling in.
Closing costs can include land transfer tax, legal fees, a home inspection, title insurance, and adjustments for property taxes or utilities the seller has prepaid.
Leave room in your budget for the ongoing cost of owning the home as well. This may include mortgage payments, property taxes, home insurance, utilities, maintenance and unexpected repairs.
So when you set your savings goal, look beyond "How much is my down payment?" and also ask: "How much money will I need to comfortably complete the purchase and move into my new home?"
Check what mortgage payment fits your budget
Your savings plan is only one part of your home-buying budget. The mortgage payment you take on after you buy also needs to fit comfortably within your monthly finances.
See current mortgage rates
A snapshot of mortgage rates currently tracked by AdvaEqs.
Use the Mortgage Calculator to see what current rates could mean for your regular payment at different purchase prices and amortization periods. Even a small difference in the interest rate can change your monthly payment and the total interest you pay over the life of the mortgage.
The lowest advertised rate is not always the best choice. You can compare mortgage rates and options side by side, looking at the term, payment frequency, prepayment options, penalties and other conditions as well as the rate.
If the payment at a particular purchase price would leave little room for savings, emergencies or other expenses, you may decide to save a larger down payment, consider a lower price, or wait until your monthly budget is more comfortable. The goal is not only to save enough to buy the home, but to make sure owning it fits into your financial life afterward.
Put the numbers together
Before you settle on a savings target, move through these steps:
1. Review current savings and GIC rates to see what your down-payment savings could earn.
2. Use the GIC Calculator if a GIC fits your timeline and you want to estimate the value at maturity.
3. Check current mortgage rates to understand today's borrowing costs.
4. Use the Mortgage Affordability Calculator to test an appropriate purchase price and down payment.
5. Use the Mortgage Calculator to estimate the resulting payment and compare scenarios.
One piece at a time
Saving for a home is a long-term goal, and you do not have to change everything at once. Start by knowing your numbers, find the areas where you can make reasonable changes, look for ways to increase what comes in, use the programs available to you, and make saving a regular habit.
A down payment can be built by spending a little less, earning a little more, and combining several sources. Start with what you know today, decide what you can change, and build your down payment one piece at a time.
This guide is general information, not financial advice. Program rules and limits can change, so verify current details with the Government of Canada, the CRA or your financial institution before making decisions.