Save for Your First Down Payment

Buying your first home is a major milestone—and learning how to save for your first down payment is a key part of the journey. Fortunately, there are effective budgeting strategies and a range of government programs designed to support Canadians in taking that first step toward homeownership. Whether you’re just beginning to save or looking to accelerate your progress, this blog offers practical tips and highlights valuable incentives available to first-time buyers in Calgary.

Budgeting Tips to Save For Your First Down Payment

1. Set a Clear Savings Goal
   Determine how much you need to save for your first down payment. Consider reaching out to get pre-approved for a mortgage so you have a clear understanding of what price you can comfortably afford for a new home. In Canada, the minimum down payment amount required is:

• • 5% for homes under $500,000
  • 5% on the first $500,000 and 10% on the remainder for homes between $500,000 and $999,999
  • 20% for homes $1 million and above

2. Track Your Spending
   Use budgeting apps or spreadsheets to monitor your monthly expenses. Identify areas where you can cut back—like dining out or entertainment subscriptions—and redirect those funds to your savings.
3. Get Rid of Existing Debt
   If you have other loans or debts, explore ways that you can manage paying these off while prioritizing savings for a new home. The ‘snowball method’ has individuals pay off their smallest debt first, before moving on to the next one until they’re done. Each debt that you pay off creates more positive cashflow and allows you to begin to save for your first down payment sooner.
4. Automate Your Savings & Pay Yourself First
   Set up automatic transfers to a dedicated savings account. Treat your down payment savings like a recurring bill to build consistency. Take care of essential bills first (such as rent) and then the next place your money should go is to your savings (before buying any discretionary items).
5. Consider a High-Interest Savings Account or TFSA
   Storing your savings in a Tax-Free Savings Account (TFSA) or a high-interest savings account can help your money grow faster without tax penalties.
6. Create a Separate “Home Fund”
   Keep your down payment savings separate from your everyday accounts. This helps you avoid dipping into it for non-essential expenses and keeps your goal front and center.
7. Use Bonus Income Wisely
   Tax refunds, work bonuses, or gifts can be powerful accelerators. Deposit these directly into your home savings account instead of spending them.
8. Set Milestones and Celebrate Progress
   Break your savings goal into smaller milestones (e.g., every $5,000 saved) and reward yourself with a small treat when you reach each one. This keeps motivation high.
9. Increase Income
   While getting a brand-new, higher paying job might not be realistic, consider if you have the time and resources to get an additional part-time job such as driving for Uber or becoming a tutor. All money made from this job can be put directly into your new home fund to help save for your first down payment.
10. Review and Adjust Monthly
    Your budget should be a living document. Revisit it monthly to adjust for changes in income, expenses, or savings goals.

Government Incentives and Programs for First-Time Buyers

Canada offers several government programs to make homeownership more accessible for first time homebuyers. Here’s a breakdown of some of the most valuable ones that can help you save for your first down payment:

1. RRSP Home Buyers’ Plan (HBP)
   This program allows first-time homebuyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP)—tax-free—to buy or build a qualifying home. Couples can combine withdrawals for a total of $120,000. Withdrawn amounts must be repaid to the RRSP over 15 years. Normally, RRSP withdrawals are taxed as income. However, under the Home Buyers’ Plan (HBP), withdrawals are not taxed if all conditions are met. The amount must be repaid over 15 years, with at least 1/15 repaid annually. If the required repayment isn’t made in a given year, the shortfall is added to your income and becomes taxable.
   • For more information on this program, including eligibility requirements and instructions on how to participate, click HERE to visit the CRA website.
2. First Home Savings Account (FHSA)
   The First Home Saving’s Account (FHSA) is a registered savings plan created to help first-time homebuyers save for a qualifying home. It offers an annual contribution limit of $8,000 and a lifetime limit of $40,000. Contributions are tax-deductible, and withdrawals used to purchase a first home are tax-free. Unlike the RRSP Home Buyers’ Plan, funds withdrawn from an FHSA do not need to be repaid.
   • For more information on this program, including eligibility requirements and instructions on how to participate, click HERE to visit the CRA website.
3. First-Time Home Buyers’ Tax Credit
   First-time homebuyers may be eligible to claim up to $10,000 when purchasing a qualifying home. To qualify, the home must be bought by the homebuyer, their spouse, or common-law partner. Additionally, neither the homebuyer nor their spouse or partner can have lived in a home they owned—either in Canada or abroad—during the year of purchase or in any of the four preceding years.
   • For more information on this program, including eligibility requirements and instructions on how to participate, click HERE to visit the CRA website.
4. First-Time Home Buyers’ GST/HST Rebate
   The First-Time Home Buyers’ GST Rebate, introduced by the Canadian government in May 2025, helps eligible buyers save on the purchase of a new home. It offers a full GST rebate for homes priced up to $1 million, and a partial rebate for homes between $1 million and $1.5 million. The maximum rebate available is $50,000, and it applies to both new construction and resale homes.
   • For a high-level breakdown on this program, check out our blog post.
   • For more information on this program, including eligibility requirements and instructions on how to participate, click HERE to visit the CRA website.

Learning how to save for your first down payment doesn’t have to be daunting. By combining smart budgeting with the available government incentives, you can make meaningful progress toward your goal. Take advantage of these tools, stay consistent with your savings, and you’ll be well on your way to unlocking the door to your first home. When you’re ready to take the next steps, reach out to our Sales Teams as they would be happy to provide you with more details on what it takes to buy a new home.