How Much Do You Need for a Down Payment on a House in Canada in 2026?

You’ve been watching the real estate market, running the numbers in your head, and wondering whether buying is even remotely possible right now. The down payment feels like the biggest hurdle — not because you don’t understand the concept, but because nobody gives you a straight answer about how much you actually need. The rules in Canada are specific, and they depend almost entirely on the price of the home you’re buying. Here’s exactly how it works.

Quick answer: In Canada, the minimum down payment is 5% on the first $500,000 of the purchase price, plus 10% on any amount between $500,000 and $999,999. For homes at $1 million or more, you need 20% upfront — no exceptions. So on a $700,000 home, your minimum is $45,000 ($25,000 + $20,000).

What Is the Minimum Down Payment in Canada?

Canada’s minimum down payment is set by federal rules and it scales with purchase price. For a home priced at $500,000 or less, you need 5% down — that’s $25,000 on a $500,000 home. For anything between $500,000 and $999,999, the rule splits: 5% on the first $500,000 and 10% on the remaining portion. So on a $700,000 home, you’d need $25,000 plus $20,000 (10% of $200,000), for a total minimum of $45,000. If the home hits $1 million or above, the minimum jumps to a flat 20% — that’s $200,000 on the dot for a million-dollar purchase. These thresholds have not changed for 2026, so the math above still holds.

There’s one more number worth knowing: when your down payment is less than 20%, you’re required to buy CMHC mortgage default insurance. That insurance premium gets added to your mortgage, so it doesn’t mean a larger upfront payment — but it does increase the total amount you’re borrowing and your monthly payment.

Quick tip: The 20% threshold isn’t just about avoiding CMHC insurance — it also gives you more negotiating power with lenders and often unlocks better rates. If you’re close, it may be worth pushing to hit it.

How Much Do You Actually Need Saved Before You Apply?

The down payment is the headline number, but it’s not the only cash you need at the table. Closing costs in Canada typically run between 1.5% and 4% of the purchase price, and they’re almost never included in your mortgage. These costs include land transfer tax (which in Ontario stacks a provincial and a Toronto municipal tax if you’re buying in the city), legal fees, a home inspection, title insurance, and your first adjustment of property taxes and condo fees. On a $700,000 home, that’s roughly $10,500 to $28,000 in closing costs on top of your $45,000 minimum down payment.

A realistic savings target for a $600,000–$700,000 home in Ontario, accounting for both the down payment and closing costs, lands somewhere between $55,000 and $75,000 total before you start shopping seriously. That’s the number most first-time buyers are caught off guard by, and it’s why starting early matters so much.

Where Should You Save Your Down Payment in Canada?

The three accounts you want to know about are the FHSA, the TFSA, and the RRSP Home Buyers’ Plan — and they work well together. The FHSA (First Home Savings Account) is the newest option and arguably the most powerful for this specific goal: you get a tax deduction on contributions (like an RRSP) and the money comes out tax-free for a qualifying home purchase (like a TFSA). You can contribute up to $8,000 per year and carry forward unused room, up to a lifetime limit of $40,000.

The RRSP Home Buyers’ Plan lets you withdraw up to $35,000 from your RRSP tax-free for a first home purchase — as long as you repay it over 15 years. Using both the FHSA and the HBP together gives you access to up to $75,000 in registered savings, tax-advantaged, toward your down payment. Most first-time buyers also keep a high-interest savings account or GIC for the portion that won’t fit in registered accounts.

How Long Will It Take to Save?

That depends on how much you can set aside each month and what accounts you’re using. If you’re saving $1,000 per month toward a $50,000 goal, you’re looking at roughly 4 years before accounting for any interest or tax refunds — which is why maximizing your FHSA early is so valuable. The $8,000 annual contribution gets you a federal tax refund of around $1,600–$2,400 depending on your income bracket, and that refund can go straight back into savings.

The honest reality for most Canadians in their 20s in high-cost cities is that reaching a full 20% down payment on a $700,000+ home takes longer than many popular timelines suggest — often 5 to 7 years of consistent, prioritized saving. Starting with a firm monthly target, automating the contributions, and putting every FHSA refund and raise back into the fund is what actually moves the needle.

Frequently Asked Questions

What is the minimum down payment on a $500,000 home in Canada?

The minimum down payment on a $500,000 home is 5%, which equals $25,000. At this price point, you’re also subject to CMHC mortgage insurance since your down payment is under 20%. Your total cash needed will be higher once you factor in closing costs of roughly $7,500 to $20,000.

Do I need 20% to buy a house in Canada?

No — you don’t need 20% unless the home costs $1 million or more. For homes under $1 million, the minimum starts at 5% on the first $500,000 of the price. The trade-off is that putting less than 20% down requires mandatory CMHC default insurance, which gets added to your mortgage balance and increases your monthly payments.

Can I use my TFSA for a down payment?

Yes. Your TFSA is a flexible savings vehicle and the money can be withdrawn at any time for any reason — including a down payment. However, unlike the FHSA, TFSA contributions don’t give you a tax deduction. Both accounts let your money grow tax-free. For a first-time buyer, using the FHSA first, then the RRSP Home Buyers’ Plan, then your TFSA as overflow is usually the most tax-efficient approach.

What is CMHC insurance and how much does it cost?

CMHC mortgage default insurance protects the lender if you stop making payments. It’s required when your down payment is between 5% and 19.99%. The premium is a percentage of your insured mortgage amount: 4% of the mortgage for a 5% down payment, 3.10% for 10% down, and 2.80% for 15% down. This premium is added to your mortgage balance, not paid upfront. On a $475,000 insured mortgage, a 4% premium adds $19,000 to what you owe.

What counts as a qualifying first-time home buyer in Canada?

To use the FHSA or the RRSP Home Buyers’ Plan, you must not have owned a home (that you occupied as a principal residence) at any point in the current calendar year or the preceding four calendar years. If you’ve owned before but sold, there’s a waiting period before you qualify again. Common-law partners and spouses both need to meet the first-time buyer rule independently when using the Home Buyers’ Plan together — one ineligible partner can disqualify both from accessing the full benefit.

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