How to Save for a House Down Payment in Canada (2026)

A house down payment is the biggest single sum most Canadians ever save for, and the number moves with the market. The average home sold for about $702,079 in May 2026 (CREA (opens in a new tab)), and on a place at that price the minimum down payment is roughly $45,000. Twenty percent, the level that skips mortgage insurance, is closer to $140,000. Those figures look heavy, so here is a plan to make saving for a down payment manageable: find your real target, pick a timeline, use the right account, and automate the rest.

How much do you need for a house down payment in Canada?

The minimum down payment in Canada is 5 percent on the first $500,000 of the price, 10 percent on any portion between $500,000 and $1.5 million, and 20 percent once the price reaches $1.5 million (Financial Consumer Agency of Canada (opens in a new tab)). On the average $702,079 home that works out to about $45,000. Put down less than 20 percent and your mortgage also needs default insurance.

That 20 percent mark matters. Below it, your loan needs mortgage default insurance from CMHC, Sagen, or Canada Guaranty, a premium added to your mortgage that gets larger the smaller your down payment (up to about 4 percent of the loan). Reach 20 percent and you skip that premium entirely. Here is the minimum, and the 20 percent figure, across a few price points.

Set your target

Your real target is a bit more than the down payment itself. Start with a home price you could actually buy where you live, apply the down-payment percentage, then add closing costs, which usually run about 1.5 to 4 percent of the price for land transfer tax, legal fees, and a home inspection. If you put down less than 20 percent, the insurance premium rides on top of your mortgage rather than your savings, so it doesn’t change what you need up front.

Worked example: a $500,000 first home at the 5 percent minimum is $25,000 down, plus roughly $10,000 for closing costs, so your savings target is about $35,000. Going for 20 percent on the same place would mean $100,000, a much bigger goal but no insurance premium and a smaller mortgage. One thing to do first: have an emergency fund in place, so a surprise bill doesn’t force you to raid the house money.

How long will it take to save?

This is where a goal turns into a habit. The table below is simple division of two common targets across realistic timelines. It doesn’t count the interest or growth you earn while saving (that helps, and where to keep it is the next section), just what you set aside each month to hit the number.

Pick the row and timeline whose monthly number you can actually keep up. A down payment is a multi-year project, and stretching from two years to five turns $1,875 a month into $750, which is often the difference between a plan you abandon and one you finish. The math scales cleanly: a $60,000 goal is $1,000 a month over five years. Our savings goal calculator runs the numbers for any target, timeline, or monthly budget.

Where should you keep a down payment?

For a first home, the best place to save is a First Home Savings Account (FHSA). Contributions are tax-deductible like an RRSP, and the growth and withdrawals for a first home are tax-free like a TFSA (Government of Canada (opens in a new tab)). You can put in up to $8,000 a year and $40,000 over the life of the account, and unused room carries forward.

After the FHSA, a few options stack on top:

• Home Buyers’ Plan (HBP). You can withdraw up to $60,000 from an RRSP tax-free for a first home, repaid over 15 years (Government of Canada (opens in a new tab)). Combined with a full FHSA, that is up to $100,000 toward a first home per person, or $200,000 for a couple who both qualify.
• TFSA. Flexible room for any goal, including topping up a down payment, with tax-free growth and nothing to repay.
• HISA or GIC. If you have used your registered room, or you are not a first-time buyer, a plain high-interest savings account or a GIC does the job.

One rule outweighs the choice of account: keep the money safe if you plan to buy within a few years. The FHSA and TFSA are wrappers, not investments, so inside them hold cash, a high-interest savings account, or a GIC, not stocks that could be down the month you need to close. Everyday high-interest savings rates sit around 2.75 percent as of June 2026 (EQ Bank’s Personal account, for example, is CDIC-insured), promotional rates reach near 4.50 percent in limited windows, and one-to-five-year GICs run about 2.25 to 3.85 percent, while the Bank of Canada holds its policy rate at 2.25 percent. For a closer look at where to park short-term savings, see our roundup of the best savings apps in Canada.

Whatever you choose, the account holding your down payment is yours, at a real Canadian bank, credit union, or registered-plan provider. Lodavo is not that account, and it never touches the money. More on that below.

Automate it so you don’t have to think about it

The Canadian household saving rate was just 3.5 percent in the first quarter of 2026 (Statistics Canada (opens in a new tab)), so almost nobody is doing this on willpower alone. Automation does the work for you.

• Pay yourself first. Set an automatic transfer into your FHSA or down-payment account for payday, before the money can drift into spending.
• Match the FHSA ceiling. The $8,000 annual limit is about $667 a month. If your plan needs more than that, send the overflow to a TFSA or HISA.
• Funnel windfalls. Your tax refund, a bonus, or a gift all belong in the pile, and a deducted FHSA contribution can grow next year’s refund.
• Raise it with every raise. Move part of each pay increase straight to the down payment before it turns into spending.

Deciding once and automating it is the highest-leverage move here. The habit runs itself while the balance grows.

How Lodavo makes saving for a down payment more fun

A down payment is a long save, and that is exactly the kind of goal that is easy to drift away from. You build it in your own bank account, in the accounts above. Lodavo is Canada’s first prize-linked savings app, and it connects to that account read-only through Plaid (opens in a new tab) (bank-grade security, scoped access, never your banking password). Plaid covers over 99 percent of deposit accounts in Canada, so almost any bank or credit union works.

Each week, Lodavo looks at your savings balance and turns the money you have kept saved into free tickets in a weekly draw, where you can win up to $10,000 and at least one member takes home a guaranteed prize of $100 or more. The more you save toward your down payment, the more tickets you get. Lodavo doesn’t provide the mortgage, doesn’t hold your savings, and never moves or charges your money. It rewards the habit you were already building. You can see past results on the winning numbers page and how each draw is verified on the provably fair page.

Lodavo also isn’t replacing the rate on your FHSA or savings account. Your money keeps earning whatever it already earns, and the weekly draw is free on top. So the same $750 a month that builds toward a $45,000 down payment also stacks up tickets every week along the way. The home is the goal. The draws keep you going while you get there.

Terms and conditions apply. No purchase necessary (alternate method of entry available). Skill-testing question required. Open to legal residents of Canada who are the age of majority. Odds depend on the number of eligible entries received. Full rules and odds at our contest rules.