Saving for a downpayment requires discipline and determination. Whether you’re aiming for the minimum downpayment (like most first-time homebuyers) or 20% down, there are some strategies to help you get there. If you are in the “saving up” stage of preparing for homeownership, this is a great time to meet.

Make it Your #1 Financial Priority

As early as you can, set up a dedicated bank account or an FHSA (see below) and start channelling every single dollar you can afford into your downpayment savings. Maybe a little off every paycheque. Your tax return. The extra funds from that long-awaited raise. Your social life might have to take a little hit but the trick is to start thinking about where any extra funds – a little or a lot – can be directed into your downpayment account.

A Gift From a Family Member

All or part of your downpayment can be gifted but here are a few important requirements that your lender will have: the gift can only come from a parent or other blood relative, such as a grandparent, you’ll need a signed letter that states the funds are a gift, and you are not required to pay the money back at any time. In other words, the money is not a loan.

Government Programs to Bolster Your Savings


This new registered plan combines features of an RRSP and TFSA, giving first-time buyers the ability to save $8,000 per year tax-free (lifetime maximum of $40,000) toward the purchase of a home. Like an RRSP, contributions are TAX-DEDUCTIBLE and any unused contribution room can be carried over into the next year. Like a TFSA, there is no tax withheld on withdrawals (provided the funds are used to purchase a qualifying home) and any interest earned or growth accumulated inside the plan is tax-exempt. If there are two eligible first-time buyers purchasing a home together, each individual can contribute to an FHSA, effectively doubling the annual savings to $16,000 per year and a maximum contribution of $80,000.


First-time homebuyers can withdraw up to $35,000 TAX-FREE from RRSPs, as long as the money has been inside the plan for at least 90 days. If you have contribution room, you can take whatever funds you’ve already saved for your downpayment (up to $35,000) and put that into your RRSP just before the contribution deadline. Then, any tax refund you get will further boost your downpayment. After 90 days, you withdraw your funds under the HBP. If you’re buying the home with a partner who is also a qualifying first-time buyer, then you can BOTH withdraw from your RRSP for a total of $70,000 towards your home. You’ll eventually need to pay back the withdrawn funds according to a repayment plan… otherwise you’ll pay the income tax.