Down Payment Options for First-Time Buyers in 2026

For first-time home buyers in Canada, saving for a down payment is often the biggest barrier to homeownership. In 2026, while mortgage rates have stabilized, down payment planning remains essential. Understanding your available options can make buying your first home more achievable and less stressful.

Minimum Down Payment Requirements in 2026

In Canada, minimum down payment rules remain unchanged in 2026:

• 5% on the first $500,000 of a home’s purchase price

• 10% on the portion between $500,000 and $999,999

• 20% for homes priced at $1 million or more

Homes under $1 million may qualify for insured mortgages, which can reduce upfront costs but include mortgage insurance premiums.

Using the RRSP Home Buyers’ Plan (HBP)

The Home Buyers’ Plan allows first-time buyers to withdraw funds from their RRSPs to use toward a down payment.

Key points for 2026:

• Up to $35,000 per individual (or $70,000 per couple)

• Withdrawals are tax-free if repaid within the required timeline

• Repayments typically begin two years after purchase

This remains one of the most popular down payment tools.

First-Time Home Buyer Incentive (FTHBI)

The First-Time Home Buyer Incentive is a shared-equity program offered by the federal government.

How it works:

• The government contributes 5% or 10% toward the purchase

• The incentive is repaid when the home is sold or after 25 years

• The repayment amount is based on the home’s value at that time

This program can reduce monthly mortgage payments but requires careful consideration.

Gifts From Family

Gifted down payments remain common in 2026. Lenders typically require:

• A signed gift letter

• Proof that funds are non-repayable

• Verification of the source of funds

Gifted funds must be properly documented to meet lending guidelines.

Using Savings, TFSAs, and Other Assets

Many buyers combine:

• Personal savings

• Tax-Free Savings Accounts (TFSAs)

• Non-registered investments

Using a TFSA for a down payment can be especially beneficial since withdrawals are tax-free.

Alternative and Creative Options

Some buyers explore:

• Co-buying with family or partners

• Shared-equity or co-ownership arrangements

• Employer-assisted housing programs (where available)

These options require legal and financial advice to avoid future complications.

Tips for First-Time Buyers in 2026

To strengthen your down payment strategy:

• Start saving early and consistently

• Keep funds in easily traceable accounts

• Avoid large unexplained deposits close to purchase

• Work with a mortgage professional to structure your plan

Final Thoughts

Down payment options for first-time buyers in 2026 are more flexible than many realize. By combining government programs, savings strategies, and family support where appropriate, Canadian buyers can overcome one of the biggest hurdles to homeownership.