Buying your first home — how much do you actually need to save?

The down payment itself isn't one flat percentage

On homes up to $500,000, the minimum down payment is 5%. Between $500,000 and $1.5 million, the first $500,000 is still 5%, and the portion above that is 10% — an $800,000 home works out to 5% of $500,000 plus 10% of $300,000, not 5% of $800,000 flat.

At $1.5 million or above, the minimum down payment is 20%, and mortgage insurance (what most people call CMHC insurance) isn't available at that price point at all. This same line also sets your amortization ceiling: first-time buyers can now choose a 30-year amortization, not just the old 25-year maximum.

A lower down payment percentage generally means a higher share of income going to the payment — whether that clears the stress test is a separate question, covered on how much you can actually borrow.

Two accounts exist specifically for first-time buyers to build that down payment

The first is the FHSA (First Home Savings Account): up to $8,000 a year, $40,000 lifetime. Contributions are tax-deductible like an RRSP, and withdrawals for a first home are tax-free like a TFSA — both benefits at once. The account stays open for at most 15 years, or until the end of the year you turn 71, whichever comes first.

The second is the HBP (Home Buyers' Plan): withdraw up to $60,000 from your own RRSP toward a first home, tax-free at the time. It has to be repaid to your RRSP within 15 years, starting no later than the second year after the year you withdrew.

These two can both be used on the same purchase — build savings in the FHSA first, and if the down payment still isn't there, pull an additional amount through the HBP from your RRSP. The two limits are entirely separate.

In BC, first-time buyers can also save on property transfer tax

On homes at $500,000 or less, the property transfer tax can be fully exempted. Between $500,000 and $835,000, the exemption starts phasing out; at $860,000 or above, none applies.

To qualify, you need to be a Canadian citizen or permanent resident, have lived in BC for a year or filed two years of BC tax returns in the past six years, never have owned a home you lived in anywhere in the world, and not have used this exemption before. The property itself also has to qualify — your sole principal residence, no more than 0.5 hectares.

Worth flagging: this program's definition of "first-time" is not the same test as the FHSA/HBP one — the next section covers exactly how they differ.

"First-time buyer" means two different things depending which program you're asking about

FHSA and HBP use a rolling window: in the year you open the account or make the withdrawal, plus the four calendar years before that, you must not have owned and lived in a home as your principal residence. Own a home further back than that, sell it, and stay out of ownership for long enough, and you can qualify as a first-time buyer again.

BC's property transfer tax exemption is different — it looks at your entire life. Own a principal residence anywhere in the world, at any point, and you no longer qualify for this specific exemption. There's no window that resets.

Because the tests differ, you can genuinely qualify for one and not the other. Worth walking through your actual ownership history to check both.

Beyond the down payment and the tax break, budget for closing costs too

Legal fees, a home inspection, title insurance, adjustments for property tax and utilities, moving — these typically add up to 1.5%-4% of the purchase price, on top of the down payment. This is the piece people most often forget to budget for, and it shows up right at closing when there's no room left to absorb it.

Saving enough for the down payment is only the first step — how much you can actually borrow and what payment you can carry is covered on how much can I actually borrow. If you're a newcomer to Canada, the down payment requirements and paperwork are somewhat different — see what newcomers need for a down payment.

Common questions