Building your down payment savings plan
Last reviewed October 30, 2026
A down payment goal can feel impossibly large until you break it into a number per month and put it in the right accounts. Here's a practical way to build a plan for buying in London.
Step 1: Set a realistic price range
Start with what's actually for sale. Look at listings for the kind of home you'd buy, such as a condo apartment, a townhouse or a semi, in the parts of London you'd consider. Note the typical prices. That's a more useful anchor than any city-wide average. Then talk to a lender about what you might qualify for on your income. Your target is the lower of the two.
Step 2: Calculate your total cash need
You need more than the down payment. Add up:
| Item | How to estimate |
|---|---|
| Down payment | See the minimum rules; more if you want to reduce insurance or payments |
| Land transfer tax (net of refund) | See worked examples |
| Tax on mortgage insurance | About 8% of the premium, if you put down less than 20% |
| Legal fees, disbursements and title insurance | Get a quote from a real estate lawyer |
| Home inspection | Get quotes from local inspectors |
| Adjustments | Prepaid property tax or condo fees reimbursed to the seller |
| Moving and setup | Movers, utility hookups, basic tools and furnishings |
| Emergency cushion | A few months of expenses, kept separate |
Step 3: Choose your accounts
- FHSA: up to $8,000 a year each, tax-deductible, tax-free out.
- TFSA: for money you need to keep flexible, like your deposit, closing costs and emergency fund.
- RRSP: if you already have RRSP savings, the Home Buyers' Plan can add to your down payment (remember the 90-day rule).
Put your FHSA tax refunds back into savings. It's a meaningful boost that's easy to spend by accident.
Step 4: Work out the monthly number
Divide your total cash need (minus what you already have) by the number of months until your target date. If the monthly number is uncomfortable, you have three levers: a longer timeline, a lower price target, or a bigger savings rate. Usually it's a mix.
Example (hypothetical): you need $40,000 in total and have $10,000 saved. Over 30 months, that's $1,000 a month. As a couple, that's $500 each, and FHSA contributions would generate tax refunds that shorten the timeline further.
Step 5: Automate it
- Set up automatic transfers on payday into your FHSA and TFSA.
- Treat it like a bill. Pay yourself first, then spend what's left.
- Redirect windfalls, such as raises, bonuses and tax refunds, at least partly to savings.
Step 6: Protect your credit
Lenders look closely at your credit history and existing debts. In the year or two before buying:
- Pay all bills on time. Late payments hurt your score.
- Keep credit card balances low relative to their limits.
- Avoid new car loans or large financed purchases, which reduce how much mortgage you qualify for.
- Check your credit reports from Equifax and TransUnion for errors.
Step 7: Check in and adjust
Every few months, review your progress, your FHSA room in CRA My Account, and the market. If prices or rates have shifted, adjust your target. Around six months before your target date, get a formal pre-approval and start viewing homes seriously.
When you're getting close
In the last few months before you buy, move your deposit money somewhere you can reach within a day. Stop moving money around between accounts unnecessarily, because lenders like simple paper trails. And keep saving for the costs that arrive after the keys: window coverings, a lawn mower or snow shovel, and your first property tax instalment.
Investing your savings
The right investments depend on your timeline. Money you'll need within a couple of years is usually kept in low-risk options like high-interest savings or GICs, so a market drop doesn't derail your purchase. Longer timelines may allow more growth-oriented investments inside your FHSA. A financial advisor can help you choose.