Canadian down payment savings calculator

A first-time buyer in the Greater Toronto Area looking at a $700,000 home needs $25,000 (5% on the first $500K) plus $20,000 (10% on the next $200K) for the minimum down payment, plus roughly $25,000 more in closing costs. That's about $70,000 of cash to walk away with the keys, before the mortgage even kicks in. Most Canadian first-time buyers will need three to seven years to save it, depending on income and savings rate. Decisions made during those years (which account holds the money, where the down-payment percentage lands, whether CMHC insurance is acceptable) make a meaningful difference to the final cost of the home.

This guide explains the Canadian down-payment math (the staircase rule, the CMHC cap, what 'first-time' actually means), the tax-sheltered accounts available for the savings (FHSA, HBP, TFSA), and the trade-off between saving longer for 20% versus buying sooner with CMHC-insured 5 to 19% down. The calculator above runs the timeline; this is the why behind it.

The Canadian down-payment math (and why 5% isn't always enough)

Most countries express the minimum down payment as a single percentage. Canada is more complicated.

The staircase rule. For homes priced at $500,000 or below, the minimum is 5% of the purchase price. For homes priced above $500,000, the minimum is 5% on the first $500,000 plus 10% on the portion above. A $700,000 home requires $25,000 + $20,000 = $45,000, which is 6.4% effective. The rule applies to insured (CMHC-backed) mortgages; uninsured conventional mortgages require 20% regardless of price.

The CMHC cap. The Canada Mortgage and Housing Corporation won't insure mortgages on homes priced over $1,500,000. Above that threshold, the buyer needs at least 20% down for a conventional uninsured mortgage. This is set out in CMHC's homeownership program rules.

The first-time-buyer extension. As of December 2024, first-time home buyers and any buyer of a newly-built home can use a 30-year amortization on insured mortgages. Most Canadian mortgages are 25-year amortizations; the 30-year option lowers the monthly payment but increases total interest. This affects what you can afford to pay each month, not what you need to save up front. The Department of Finance Canada's housing affordability update covers the details.

Where to save it: the FHSA / HBP / TFSA stack

Three federally-blessed accounts can hold down-payment savings, and a smart Canadian first-time buyer uses all three in roughly this order:

1. FHSA. Combines the deductibility of an RRSP with the tax-free withdrawals of a TFSA, but only for a first-home purchase. Annual contribution room is $8,000, lifetime cap is $40,000*. Unused room rolls over within limits. Contributions reduce taxable income in the year of contribution; qualifying withdrawals are completely tax-free. The CRA's FHSA guidance covers eligibility and qualifying-withdrawal rules. For most first-time buyers, the FHSA is the highest-value account; max it before adding anywhere else.

2. RRSP Home Buyers' Plan (HBP).* Lets a first-time buyer withdraw up to $60,000 from their RRSP toward a home purchase, raised from $35,000 in April 2024. The withdrawal must be repaid to the RRSP over 15 years. The advantage is the immediate tax deduction on the contributions; the catch is the 15-year repayment, which feels heavier as you get further into the mortgage. Best used as a top-up after the FHSA is full.

3. TFSA.* Once the FHSA is full and the HBP is planned, additional savings flow to a TFSA. Tax-free growth, withdrawals at any time without penalty, contribution room restored the next calendar year. Less powerful than the FHSA for a first-home purchase (no contribution deduction) but unlimited use case (not just for a home).

4. Non-registered savings. If all three are full, additional savings go into a regular HISA. Less common situation; only applies if you're targeting an expensive home with a long savings horizon.

Specifically NOT recommended: an RRSP that you don't plan to use the HBP on (you'll be taxed on the eventual withdrawal); a stock portfolio if your purchase is within three years, since the day you need the money is also the day the market is down.

5% vs 10% vs 20%: the strategic question

The minimum down payment in Canada is 5% (or the staircase equivalent for homes over $500K). The threshold for avoiding CMHC insurance is 20%. Saving more than the minimum has a real cost (the years you spend renting and saving instead of building equity) and a real benefit (lower CMHC premiums, smaller monthly payment, less total interest). The right answer depends on local rent versus ownership math and how patient you can be.

Three scenarios where buying at 5 to 10% with CMHC insurance is the right call. You're paying high rent in a market with strong long-run price growth, and the time-to-20%-savings is more than two years; the cost of waiting probably exceeds the cost of CMHC insurance. You expect a major life event (marriage, kids, transfer) that pins you in one place; the transaction cost of buying at 5% and selling-to-rebuy is a five-figure number, so getting into the right house first matters more than optimizing the down payment. You can save the difference but the market is moving faster than your savings in a measurable way; if home prices in your city are rising 8% a year and you're saving 4%, the math no longer favours waiting.

Three scenarios where saving longer for 20% is the right call. You're in a stable rental that costs less than you'd pay owning, you can save aggressively, and you don't need to move within the next three years. The local market is flat or falling. You're young enough that an extra year of saving doesn't materially affect retirement timelines.

Closing costs Canadian buyers always underestimate

The down payment isn't the whole cash requirement. On top of it, expect:

Land transfer tax. Set by each province; in Ontario it's tiered from 0.5% to 2.5% with first-time buyer rebates; British Columbia and Quebec are similar. Toronto and Halifax add a municipal land transfer tax that effectively doubles the provincial bill. On a $700,000 home in Toronto, this can total $10,000 to $15,000 before any rebate.

Legal fees. A real-estate lawyer typically charges $1,500 to $2,500 for closing. Required, not optional.

Home inspection. $400 to $700 for a single-family home. Optional but strongly recommended; the inspection report often catches issues that justify a price renegotiation.

Title insurance. $250 to $400 typically. One-time payment.

PST on the CMHC premium. Ontario, Quebec, and Saskatchewan charge provincial sales tax on the CMHC premium itself, payable as cash at closing (not financed into the mortgage). On a $700,000 home in Ontario with a 4% CMHC premium, that's about $28,000 × 8% = $2,240 of cash.

Property tax adjustment. If the seller pre-paid property tax for the year, you reimburse them at closing. Usually a few hundred to a few thousand dollars.

Total typical closing costs. Roughly 3 to 4% of the home price. On a $700K home, that's another $21,000 to $28,000 of cash you need at closing. The CalcNorth closing costs calculator computes the per-province total and lets you see exactly what you'd owe.

Don't go to the lawyer's office expecting only the down payment. Build the closing-cost buffer into your savings target.

When the savings horizon is long: blending growth assets

If you're more than five years out, holding the entire down-payment fund in a HISA leaves meaningful growth on the table. The 4 to 5% HISA rate is essentially the inflation rate plus a thin real return; equity portfolios historically return more, but with year-to-year volatility that isn't acceptable when the purchase is two years away.

A reasonable blend for a five-to-seven-year horizon: 60 to 70% in a HISA inside the FHSA or TFSA, 30 to 40% in a low-fee balanced ETF (something like Vanguard's VBAL or VGRO, or the iShares equivalents). Rebalance toward more cash as the purchase date approaches; by the time you're 18 months out, the entire fund should be in cash or near-cash.

For horizons under three years, skip the equity allocation entirely. The risk of a 20 to 30% market drawdown in the year you actually need the money is too high. Keep the savings in a HISA, accept the modest return, and focus on contribution rate (which compounds faster than rate at short horizons anyway).

Frequently asked questions

What's the absolute minimum down payment in Canada?

5% on the first $500,000 of the home price, then 10% on the portion above $500,000. A $400K home needs $20K (5%); a $700K home needs $45K (5% + 10% staircase = 6.4% effective); a $1.5M home needs $150K (10% effective). Above $1.5M, CMHC won't insure at all, so you need 20% down for a conventional mortgage. The minimum is the floor; many Canadian buyers aim higher to lower the CMHC premium and the monthly payment.

What's the difference between an FHSA and the RRSP Home Buyers' Plan?

The FHSA gives you both an immediate tax deduction (like an RRSP) and tax-free qualifying withdrawals (like a TFSA), but it's capped at $40,000 lifetime. The HBP lets you withdraw up to $60,000 from your existing RRSP, but the withdrawal has to be repaid to the RRSP over 15 years. The FHSA is generally the better tool for new savings; the HBP is the better tool for accessing existing RRSP balances. Most first-time buyers use both: max the FHSA first, then top up with HBP if more is needed.

Can I use both an FHSA and the HBP?

Yes. The two programs stack: you can have up to $40,000 in an FHSA AND withdraw up to $60,000 via the HBP, for a combined $100,000 toward a first home. This is meaningfully bigger than either alone and is the most tax-efficient way to fund a Canadian first-home purchase.

Should I save 20% or buy sooner with CMHC insurance?

Depends on your local market and patience. The math: 20% saves about $50K to $150K of lifetime interest on a typical Canadian mortgage versus 5% with CMHC. The cost: each year of waiting is a year of rent (commonly $24K to $42K in major Canadian cities) and the home you want may be more expensive when you're finally ready. If your local market is stable and you're paying low rent, save longer. If your market is rising faster than your savings rate and you're paying high rent, buying sooner with CMHC is usually better.

Do I have to be a first-time buyer to use the FHSA?

Yes. You qualify if you (or a spouse you live with) haven't owned a qualifying home in the year you open the account or in the four preceding calendar years. Once you open the FHSA, you have up to 15 years to use it for a qualifying first home; if you don't, the balance can transfer to an RRSP without affecting RRSP room or be withdrawn (taxable). The CRA's FHSA guidance has the full eligibility rules.

What counts as a 'first home' for the FHSA?

A qualifying home is a residential property in Canada that you intend to occupy as your principal residence within one year of purchase. It can be a detached house, condo, townhouse, mobile home, or a unit in a co-op. You must enter into a written agreement to buy or build before October 1 of the year following the withdrawal. The FHSA can't be used for a vacation property or an investment property.

How much should I have on top of the down payment for closing costs?

Plan for 3 to 4% of the home price. On a $700K home, that's about $21,000 to $28,000 of additional cash. The biggest items are land transfer tax (especially in Ontario and BC, doubled by Toronto's MLTT or BC's PTT), legal fees, the CMHC premium PST in some provinces, and property tax adjustments. The CalcNorth closing costs calculator computes the exact per-province total. Buyers who don't budget for these often end up scrambling for cash in the week before closing.

Can my parents gift me the down payment?

Yes, and it's increasingly common. The lender will typically require a signed gift letter stating the funds are a gift and not a loan, plus proof of the deposit clearing into your account at least 30 days before closing. There's no Canadian gift tax, but the gift can affect the parents' own retirement savings; a proper conversation about whether the gift is sustainable for them matters more than the mortgage paperwork.