How much do I need for a down payment in Canada in 2026?

The minimum down payment is 5% for homes up to $500,000. For homes between $500,001 and $1,499,999, it's 5% on the first $500K plus 10% on the remainder. Homes at $1,500,000 or above require 20%. As of December 15, 2024, the insured mortgage cap increased from $1M to $1.5M.

What is the First Home Savings Account (FHSA)?

The FHSA lets first-time buyers save up to $40,000 tax-free for a home purchase. Contributions are tax-deductible (like an RRSP), growth is tax-free, and withdrawals for a qualifying home purchase are completely tax-free. You can contribute up to $8,000 per year with unused room carrying forward.

Can I use both the FHSA and the Home Buyers' Plan together?

Yes. You can use both programs simultaneously. A couple could potentially access over $200,000, being $40,000 FHSA each plus $60,000 HBP each, making it much easier to reach a 20% down payment.

What credit score do I need to buy a home in Canada?

A score of 680+ gives you access to the best mortgage rates. Scores between 600-679 can still qualify through alternative lending options but at higher rates. Below 600 typically needs credit repair work before qualifying.

What is the mortgage stress test?

The stress test requires you to qualify at the higher of 5.25% or your contract rate plus 2%. For example, if your rate is 4.5%, you must qualify at 6.5%. This reduces your maximum purchasing power by roughly 20% compared to your actual payments.

How much are closing costs in Canada?

Budget 1.5% to 4% of the purchase price. This includes legal fees ($1,000-$2,000), title insurance ($200-$400), home inspection ($400-$600), appraisal ($300-$500), land transfer tax (varies by province, $0 in Alberta), and moving costs.

Can first-time buyers get a 30-year amortization?

Yes. As of December 15, 2024, first-time buyers and purchasers of new builds can get 30-year amortization on insured mortgages (less than 20% down). There is an additional 0.20% insurance surcharge for the extended amortization.

What is the enhanced GST rebate for first-time buyers?

The enhanced GST/HST rebate provides up to $50,000 back on newly built homes up to $1,000,000, phasing out between $1M and $1.5M. For purchase agreements signed on or after May 27, 2025. Ontario buyers may receive an additional provincial HST rebate up to $80,000.

Can I buy a home if I've been self-employed for less than 2 years?

Yes. While most insured mortgage programs require 2 years of self-employment history, buyers with 20% or more down payment can qualify with less history through conventional mortgage programs. Medical professionals may also qualify through specialized professional programs with reduced documentation requirements.

First-Time Home Buyer Guide Canada 2026

By Alex McFadyen, Mortgage Broker at Flow Mortgage Co.. Published September 4, 2026. Updated September 4, 2026.

A first purchase in Canada needs 5% down on the first $500,000 of the price, a credit profile a lender will accept, and enough left over for closing costs of 1.5% to 4%. The two savings programs built for first-time buyers, the FHSA and the Home Buyers Plan, can be used together. This guide covers what you need, what the stress test does to your budget, and the order to do it in.

What you need for a down payment

The minimum is 5% for homes up to $500,000. Between $500,001 and $1,499,999 it is 5% on the first $500,000 plus 10% on the remainder. At $1,500,000 and above you need 20%. The insured mortgage cap moved from $1,000,000 to $1,500,000 on December 15, 2024, which brought a large band of the market back within reach of a smaller down payment.

Below 20% down the mortgage is insured, which adds a premium to the balance. At 20% or more the mortgage is conventional and no premium applies.

The FHSA and the Home Buyers Plan together

The First Home Savings Account lets you save up to $40,000 toward a first home, with contributions of up to $8,000 a year and unused room carrying forward. Contributions are deductible, growth is tax free, and a withdrawal for a qualifying purchase is tax free.

The Home Buyers Plan lets you withdraw up to $60,000 from an RRSP. You can use both. A couple using both programs to their limits can reach over $200,000 of down payment, which is what moves many first purchases from insured to conventional.

What the stress test does to your budget

You have to qualify at the higher of 5.25% or your contract rate plus 2%. On a 4.5% rate that means qualifying at 6.5%. The practical effect is that your approval is roughly 20% smaller than the payment you would be making.

Plan the search around the qualifying number rather than the payment number, so an accepted offer does not fall apart at financing.

Credit and qualifying

A score of 680 or above opens the best rates. Between 600 and 679 you can still qualify, often through alternative lenders and at a higher rate. Below 600 the usual sequence is credit repair first, purchase second.

Lenders look at more than the score. Payment history, how much of your available credit you are using, and any recent applications all feed the decision, so it is worth pulling your own report a few months before you shop.

Closing costs, and where the province matters

Budget 1.5% to 4% of the purchase price on top of the down payment. That covers legal fees of roughly $1,000 to $2,000, title insurance of $200 to $400, a home inspection of $400 to $600, an appraisal of $300 to $500, and moving costs.

Land transfer tax is the line that swings most by province. Alberta charges no land transfer tax, while British Columbia does, with a first-time buyer exemption that depends on the price. Check the number for your province before you set a maximum offer.

New builds, 30 year amortization and the GST rebate

Since December 15, 2024, first-time buyers and buyers of new builds can take a 30 year amortization on an insured mortgage. The longer amortization lowers the payment and carries an additional 0.20% insurance surcharge.

On newly built homes there is an enhanced GST and HST rebate of up to $50,000 for homes up to $1,000,000, phasing out between $1,000,000 and $1,500,000, for purchase agreements signed on or after May 27, 2025. Ontario buyers may also receive a provincial HST rebate of up to $80,000. Confirm current eligibility with us before you rely on it in a budget.

Get a real pre-approval before you shop

A rate hold is not the same as an approval. A true pre-approval means a lender has reviewed your income documents, your credit and your down payment source, and has committed subject to the property.

We put that file together before you start viewing, so your offer carries weight and the financing condition is a formality rather than a risk.

Frequently asked questions

How much do I need for a down payment in Canada in 2026?: The minimum down payment is 5% for homes up to $500,000. For homes between $500,001 and $1,499,999, it's 5% on the first $500K plus 10% on the remainder. Homes at $1,500,000 or above require 20%. As of December 15, 2024, the insured mortgage cap increased from $1M to $1.5M.
What is the First Home Savings Account (FHSA)?: The FHSA lets first-time buyers save up to $40,000 tax-free for a home purchase. Contributions are tax-deductible (like an RRSP), growth is tax-free, and withdrawals for a qualifying home purchase are completely tax-free. You can contribute up to $8,000 per year with unused room carrying forward.
Can I use both the FHSA and the Home Buyers' Plan together?: Yes. You can use both programs simultaneously. A couple could potentially access over $200,000, being $40,000 FHSA each plus $60,000 HBP each, making it much easier to reach a 20% down payment.
What credit score do I need to buy a home in Canada?: A score of 680+ gives you access to the best mortgage rates. Scores between 600-679 can still qualify through alternative lending options but at higher rates. Below 600 typically needs credit repair work before qualifying.
What is the mortgage stress test?: The stress test requires you to qualify at the higher of 5.25% or your contract rate plus 2%. For example, if your rate is 4.5%, you must qualify at 6.5%. This reduces your maximum purchasing power by roughly 20% compared to your actual payments.
How much are closing costs in Canada?: Budget 1.5% to 4% of the purchase price. This includes legal fees ($1,000-$2,000), title insurance ($200-$400), home inspection ($400-$600), appraisal ($300-$500), land transfer tax (varies by province, $0 in Alberta), and moving costs.
Can first-time buyers get a 30-year amortization?: Yes. As of December 15, 2024, first-time buyers and purchasers of new builds can get 30-year amortization on insured mortgages (less than 20% down). There is an additional 0.20% insurance surcharge for the extended amortization.
What is the enhanced GST rebate for first-time buyers?: The enhanced GST/HST rebate provides up to $50,000 back on newly built homes up to $1,000,000, phasing out between $1M and $1.5M. For purchase agreements signed on or after May 27, 2025. Ontario buyers may receive an additional provincial HST rebate up to $80,000.
Can I buy a home if I've been self-employed for less than 2 years?: Yes. While most insured mortgage programs require 2 years of self-employment history, buyers with 20% or more down payment can qualify with less history through conventional mortgage programs. Medical professionals may also qualify through specialized professional programs with reduced documentation requirements.