First-Time Buyer Mortgage Planning Guide › Chapter 4
How much do I really need for a down payment?
By Rajiv Verma, Mortgage Broker · Mortgage Architects, FSRA Brokerage Licence #12728 · Updated November 3, 2026
Short answer: for homes under $1.5 million, the minimum is 5% on the first $500,000 and 10% on the portion above it. On an $800,000 home, that’s $55,000. But the minimum isn’t the whole story. Where the money comes from, and when you move it, matters just as much as how much you have.
What’s the minimum down payment?
| Home price | Minimum down payment |
|---|---|
| $500,000 | $25,000 (5%) |
| $700,000 | $45,000 (6.43%) |
| $800,000 | $55,000 (6.875%) |
| $1,000,000 | $75,000 (7.5%) |
| $1,500,000 or more | 20% (no insured option) |
What are my down payment options?
The basics
Your own savings. Lenders want to see where it came from. Keep 90 days of statements, and don’t move large amounts around without a paper trail.
Smart moves
First Home Savings Account (FHSA). Contribute up to $8,000 a year, to a $40,000 lifetime limit. Contributions are tax-deductible like an RRSP, and withdrawals for your first home are tax-free like a TFSA. Unused room carries forward, but only up to $8,000 a year, and the account can stay open for up to 15 years. You qualify if you haven’t lived in a home you owned in the current year or the previous four. If you haven’t opened one, open it now: contribution room only starts building once the account exists.
RRSP Home Buyers’ Plan (HBP). Withdraw up to $60,000 from your RRSP tax-free for your first home, then repay it to your RRSP over 15 years. For withdrawals made from 2022 to 2025, repayments start in the fifth year after the withdrawal; a missed repayment is added to your taxable income. Contributions made in the 90 days before you withdraw lose their tax deduction, so plan ahead. Confirm the current rules with your accountant.
Use both, and double it as a couple. You can use the FHSA and the HBP together, and each partner can use both. A couple could have up to $80,000 from FHSAs and $120,000 from the HBP.
A gift from family. You’re not alone: in CMHC’s 2025 survey, 41% of first-time buyers received a gift or inheritance toward their down payment, averaging about $74,570. Lenders accept gifts from immediate family, with a signed gift letter confirming it doesn’t need to be repaid, and proof the money is deposited in your account well before closing (often 15 to 30 days). Tip: have the funds transferred directly from the family member’s account to yours, so the paper trail is clean. Cash handed over and then deposited is much harder to document.
FHSA explained → · Home Buyers’ Plan → · Gifted down payments →
Nobody told me this
The FHSA deduction is worth more the more you earn. An $8,000 contribution could save roughly $1,500 to $2,400 in tax at lower and middle brackets, and over $4,000 at the top Ontario bracket. That refund can go straight back into your down payment. Your accountant can confirm your number.
Advanced strategies
Rajiv’s RRSP Manoeuvre (for higher-income buyers with RRSP room). Canada has no true $0 down payment, but this is one legitimate option for the right buyer. You take an RRSP loan, contribute it to your RRSP, use the tax refund to pay the loan down, then withdraw up to $60,000 through the Home Buyers’ Plan once the 90-day window has passed. You need unused RRSP deduction room, the refund arrives only after you file (or sooner through a CRA form T1213), and you’ll carry the loan payment and future HBP repayments at the same time. It works best when your income can carry the RRSP loan payment in the mortgage qualification and you’re in a high tax bracket. Compared with borrowing your down payment on a line of credit or card, it usually avoids the higher premium charged on borrowed down payments. This is a general strategy, not tax advice: speak with your accountant, and I’ll confirm how the lender and insurer will treat it for your file.
FHSA + RRSP loan hybrid. If you already have some savings, put that cash through your FHSA first for its own tax refund, and use that refund to pay down the RRSP loan faster. Confirm the tax side with your accountant.
Top up to 20%. If you’re close to 20% and reaching it won’t empty your savings, getting there removes the insurance premium. Chapter 5 shows when this is worth it.
Borrowed down payment. Some insurer programs accept a borrowed down payment for well-qualified buyers, at a higher premium, and the loan payment counts against your borrowing power. Use with care.
Co-borrower or co-signer. A parent or partner can strengthen your application. A co-borrower is usually on title; a co-signer guarantees the loan. Both affect their own borrowing power.
Co-signer vs co-borrower → · Can my parents help? →
What should I do, and what should I avoid?
Do: open your FHSA now · keep 90 days of statements · get gift letters signed early · contribute to your RRSP at least 90 days before you plan to withdraw
Don’t: deposit cash you can’t trace · move money between accounts without records · empty every account just to reach 20%
Frequently asked questions
Can I use my FHSA and the Home Buyers’ Plan together?
Yes. You can use both for the same purchase, and each partner can use both.
Can my parents gift me the down payment?
Yes. Immediate family can gift it with a signed gift letter, and the money should be in your account well before closing.
What’s the minimum down payment on an $800,000 home?
$55,000: 5% on the first $500,000 and 10% on the remaining $300,000.
Questions about your situation?
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Rajiv Verma, Mortgage Broker · Mortgage Architects, FSRA Brokerage Licence #12728 · 15 Gateway Blvd, Unit 201, Brampton, Ontario · Office 289.505.0631 · Direct 647.291.7116
This guide is general education, not personal financial, legal or tax advice. Rates shown are examples as of November 3, 2026, for comparison only, and are not a quote or a commitment to lend. Your rate and approval depend on your application, credit, income, property and lender guidelines. Program rules can change.