- Under $500,000, the minimum down payment is 5%, with a loan insured by CMHC.
- The FHSA and the HBP let you save tax-sheltered, and they add up.
- Since 2026, Québec refunds the welcome tax to eligible first-time buyers, up to $5,875.
The 5% rule
For a property under $500,000, the minimum down payment is 5%. On a $400,000 house, that is $20,000, not $80,000. Between $500,000 and $1.5 million, it is 5% on the first $500,000 and 10% on the rest.
With less than 20% down, your loan must be insured, most often by CMHC. The premium is added to the amount borrowed. It is a real cost, but it is also what lets most first-time buyers become owners without waiting years. Since December 2024, first-time buyers taking an insured loan can also amortize it over 30 years, which lowers the monthly payment.
Two programs that speed up saving
The FHSA, the first home savings account, lets you contribute up to $8,000 a year and $40,000 over your lifetime. Contributions reduce your taxable income, and withdrawals for a first purchase are not taxed. Open it early: unused room carries forward, but only from the day the account is opened.
The HBP, the home buyers' plan, lets you withdraw up to $60,000 from your RRSPs tax-free for a first purchase, provided you repay it over 15 years. The two programs add up, and if you buy with someone, each eligible person has their own limits.
The first-time buyer tax credits
Federally, the home buyers' amount gives a non-refundable credit of about $1,500 in the year of purchase.
In Québec, this is new and few people know it: since January 1, 2026, a refundable home ownership tax credit refunds the transfer duties paid to the municipality, the welcome tax. The first $5,000 is refunded in full, then 25% of the excess, up to a maximum of $5,875. The credit shrinks for properties over $750,000. On a $400,000 house in Gatineau, the welcome tax is about $4,100: it would be refunded in full.
Frequently asked questions
Is a 5% down payment a bad idea?
It is neither good nor bad in itself. You pay a loan insurance premium, but you enter the market years earlier. What matters is that the full monthly payment, premium included, stays comfortable. That is the calculation in step 4.
On $400,000: $20,000 minimum down payment. FHSA ($8,000 a year, $40,000 lifetime) and HBP ($60,000) add up. First-time buyers' welcome tax is refunded by Québec since 2026, up to $5,875.
- Open an FHSA if you have not already, even with a small amount.
- Check your RRSP balance and your HBP eligibility.
- Calculate 5% of the price you are aiming for, plus a reserve for the costs in step 4.
- Set up an automatic transfer on payday.
Sources : Government of Canada, FHSA · Government of Canada, HBP · Revenu Québec, refundable home ownership tax credit (2026) · CMHC, mortgage loan insurance and minimum down payment
Get the guide, the budget worksheet and the checklists
The nine chapters as a PDF, a fill-in budget worksheet and the checklists for every step, in your inbox. Three questions, thirty seconds.