Most first-time buyers in Ontario do not save one big pile of cash. They stack a down payment from several places at once. The seven that do the heavy lifting are the FHSA, the RRSP Home Buyers' Plan, a TFSA, a gift from family, buying with someone else, a carefully used line of credit, and picking a home where rent helps you qualify.
The target is smaller than most renters think. On a home priced up to $500,000, the minimum down payment is 5%. Above that, it is 5% of the first $500,000 plus 10% of the rest, up to $1.5 million.
Here is a round example, not a market price. On a $600,000 home, the minimum is $25,000 on the first $500,000, plus $10,000 on the last $100,000. That is $35,000. Not $120,000. Most people who rent assume they need 20%. You don't, as long as the home costs under $1.5 million and you buy mortgage insurance.
So the real question is not "can I ever save $120,000?" It is "where does my $35,000 (or so) come from?" Here are the seven places.
1. A First Home Savings Account (FHSA)
This is the strongest tool a first-time buyer has. You can put in $8,000 a year, up to $40,000 in your life. What you put in comes off your taxable income, like an RRSP. When you take it out to buy your first home, you pay no tax on it. Not on what you put in, and not on what it grew.
Two details matter more than people think:
- Open it now, even with $0 in it. Your room only starts building once the account is open. Unused room carries forward, up to $8,000 into the next year. Open it this year, skip it, and next year you can put in $16,000.
- It is per person. Two buyers means two FHSAs. That is up to $80,000 of tax-free down payment between you, over time.
You qualify if you live in Canada, are at least 18, and have not lived in a home you or your spouse owned in this year or the past four years.
2. The RRSP Home Buyers' Plan (HBP)
If you have RRSP savings, you can take out up to $60,000 to buy your first home, tax-free. It is a loan to yourself. You pay it back into your RRSP over 15 years.
Right now there is extra breathing room. If your first withdrawal is between 2026 and the end of 2028, repayments start in the fifth year after, not the second. The CRA's own example: take it out in 2026, and your first payback year is 2031. That gives you a few years to settle in before the payments start.
You can use the HBP and your FHSA for the same home. One person could use up to $40,000 from an FHSA and up to $60,000 from an RRSP. That is more than enough for the minimum on most first homes.
3. A TFSA
The TFSA has no special home rules. That is its strength. Every dollar you take out is yours, tax-free, any time. The 2026 limit is $7,000, and unused room from past years carries forward.
The smart order for most people: fill the FHSA first because you get the tax deduction, then use the TFSA for closing costs and a cushion. Ask your mortgage professional which order fits your income.
4. A gift from family
A non-repayable gift from a relative is an accepted down payment source. If your down payment is under 20%, lenders usually want the gift to come from immediate family: a parent, grandparent or sibling, by blood, marriage or adoption. The giver signs a letter saying it is a gift, not a loan, and never has to be paid back. Your lender will tell you exactly what proof they need.
This is far more common than people admit. The Bank of Canada found that about 11% of first-time buyer mortgages in 2025 had a parent co-signing, up from 4% in 2004. Families are already helping. If yours might, there is a better way to have that talk than asking for a cheque. We wrote a separate guide on how parents can help without hurting their own retirement.
Here is how that often plays out. Picture a couple renting a two-bedroom on the Mountain, both working, about $18,000 saved after three years. They figured they were five years away. Then a parent asked a simple question at Sunday dinner: what would it actually take? The answer was smaller than anyone expected. The parents gave a gift with a signed gift letter, and the couple opened two FHSAs that same month. Within a year they owned a house with a basement unit, and the tenant downstairs carries a big part of the mortgage. The gift did not buy the house. It moved the date.
5. Buy with someone else
Two incomes. Two FHSAs. Two Home Buyers' Plans. Buying with a sibling, a friend or a partner can cut your timeline in half, because the down payment, the mortgage and the monthly cost are shared.
It also needs more care. You will choose how you hold title, sign a co-ownership agreement, and write down the exit plan before you buy. Do it right and it is one of the fastest paths in. We wrote a full guide on buying with a friend in Ontario.
6. A line of credit (the careful one)
Yes, you can sometimes borrow your down payment. Two of Canada's mortgage insurers, Sagen and Canada Guaranty, publish programs for it. CMHC's consumer page also lists unsecured loans and lines of credit as a possible source. The rules are tight:
- It is for one- or two-unit homes you live in.
- You need strong credit.
- The loan payment counts against you when the lender works out how much mortgage you can carry.
That last point is the catch. Every dollar of monthly loan payment shrinks your mortgage budget. And not every lender offers it, because the lender, not you, picks the insurer.
How to get one: a bank or credit union looks at your credit score, your income and your other debts. But do not open new credit right before you apply for a mortgage without asking first. A mortgage professional can tell you if it helps or hurts your numbers.
7. Pick a home where the rent helps you qualify
This is the one most renters never hear about. If you buy a home with two units and live in one, you pay the same 5% minimum as a single house. And the rent from the other unit can help you qualify. A triplex or fourplex works too: you need at least 10% down, and lenders can count up to half of the rent from the other units, so two or three tenants help carry one mortgage.
CMHC's rules say that on an owner-occupied two-unit home, up to 100% of the gross rent from the other unit can be counted toward qualifying. Lenders and the other insurers set their own rules, and many count less. Ask your lender how much of the rent they will count.
In Hamilton, that usually means a duplex, a triplex, or a house with a legal basement unit. A typical two-bedroom unit around here rents for $1,900 a month (our free Hamilton house hack guide breaks it down by area). That is money that can help carry your mortgage instead of someone else's.
This is called house hacking, and it is how a lot of first-time buyers get in sooner. The full Hamilton picture is here: the Hamilton House Hack Starter Kit. If you are looking outside Hamilton, the general starter kit is here: the House Hack Starter Kit.
Don't forget the money that comes back
Ontario refunds up to $4,000 of land transfer tax for first-time buyers. If you qualify, there is no Ontario land transfer tax on the first $368,000 of the price. Your lawyer usually claims it for you on closing day. That is $4,000 you don't have to save.
If you buy a brand-new home, there is more. First-time buyers can now get back the GST on a new home up to $1 million, plus up to $80,000 of the Ontario part of the HST. Resale homes do not qualify.
And if your down payment is under 20%, first-time buyers can stretch the mortgage over 30 years instead of 25. That lowers the monthly payment.
Where to start this week
Open an FHSA, even if you put in $10. It starts your clock. Then write down what you have today in each of the seven buckets. Most people find they are closer than they thought.
If you want the full first-home path laid out, start here: the First Home Money Map.
Before you act on any of this, talk to a mortgage professional about your numbers and a real estate lawyer about anything you sign.
Common questions
What is the minimum down payment in Ontario in 2026?
5% on a home priced up to $500,000. Between $500,000 and $1.5 million, it is 5% of the first $500,000 plus 10% of the rest. At $1.5 million and up, it is 20%.
Can I use my FHSA and the RRSP Home Buyers' Plan for the same home?
Yes. The CRA lets you make a qualifying FHSA withdrawal and HBP withdrawals for the same home, as long as you meet the rules for each one.
Can my parents give me my down payment?
Yes. A non-repayable gift from a relative is an accepted down payment source. On an insured mortgage, lenders usually want it from immediate family, with a signed gift letter saying it never has to be paid back.
Can I borrow my down payment on a line of credit?
Sometimes. Some mortgage insurers allow a borrowed down payment on a one- or two-unit home you live in, for buyers with strong credit, but the loan payment counts against what you can borrow. Not every lender offers it, so ask before you open any new credit.