Canada's housing affordability crisis is among the most severe in the world. The average home price nationally exceeded $700,000 in major markets — with Toronto and Vancouver averaging well over $1 million. The federal government has introduced several programs to help first-time buyers.
The key numbers (2026)
The First Home Savings Account (FHSA) — the best tool
The FHSA combines the best features of TFSA and RRSP for first home buyers:
- Contributions are tax-deductible (like RRSP)
- Withdrawals for a qualifying first home are tax-free (like TFSA)
- Annual limit: $8,000. Lifetime limit: $40,000
- Unused room carries forward one year
- A couple, both with FHSAs: $80,000 in combined tax-free first home savings
The RRSP Home Buyers' Plan (HBP)
First-time buyers can withdraw up to $35,000 from their RRSP tax-free for a home purchase (raised from $25,000 in 2024). A couple can withdraw $70,000 combined. The withdrawal must be repaid to the RRSP over 15 years (1/15th per year), or the unpaid amount is included as income.
Down payment requirements
| Purchase price | Minimum down payment | CMHC insurance? |
|---|---|---|
| Under $500,000 | 5% | Yes (up to 4% of mortgage) |
| $500,001–$999,999 | 5% on first $500k + 10% on remainder | Yes |
| $1,000,000+ | 20% | No (CMHC doesn't insure these) |
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