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From Savings to Homeownership: A Step-by-Step Guide to Buying Your First Home

  • Feb 20
  • 5 min read

Updated: Feb 22

Note: this article is for educational purposes only and is not financial or tax advice. Ensure you consult a financial professional and/or tax professional when making investment decisions, or decisions that may have tax implications.


Today, we're discussing something on the minds of many aspiring homeowners – how to make that dream of owning your first home a reality. We'll explore the power of First-Time Home Buyers' Savings Accounts (FHSAs), down payments, and what it takes to buy a home in different parts of this vast country.


 

How First-Time Home Buyers Can Use an FHSA to Save for a Down Payment


First, let's talk about First-Time Home Buyers' Savings Accounts (FHSAs) – your secret weapon in the battle for homeownership. FHSAs are like the turbo boost for your down payment savings. As a first-time homebuyer, you can open an FHSA to save specifically for your down payment. It's a dedicated savings account that helps you sock away funds for that big purchase faster by leveraging tax deductions.



Using an FHSA for Your Down Payment


So, how does it work? When you contribute money to your FHSA, you can deduct these contributions from your income tax, meaning your contributions allow you to pay less income tax, speeding up your ability to save more for a down payment! Additionally, funds invested from your FHSA are generally tax-free, and qualifying withdrawals toward a first home purchase are also tax-free.


That's right, tax-free! It's like having a financial ally that keeps your hard-earned money safe and growing as fast as possible.


Who Can Open an FHSA?


Now, let's talk about eligibility. Who can open an FHSA? To qualify, you must be a resident, at least 18 years old, and a first-time homebuyer. It's like getting an exclusive invitation to the homeownership club.


How Much Can You Contribute to an FHSA?


With an FHSA in Canada, you can contribute up to $8,000 per year, to a lifetime maximum of $40,000. Contributions are tax-deductible, your investments grow tax-free, and qualifying withdrawals for your first home are also tax-free.


Can You Combine the FHSA with Other Programs?


Absolutely, the FHSA can be combined with the Home Buyers' Plan which allows you pull money out of your RRSP to help purchase your first home. The HBP is like your financial sidekick. It allows you to withdraw up to $60,000 per person from your RRSP to buy your first home, $120,000 combined for couples. Buyers can avoid withdrawal tax penalties by paying back their RRSP contributions within 15 years.


When you combine it with your FHSA savings, you're stacking the deck in your favor.


What Is the Minimum Down Payment for a Home?



Let's shift gears and talk about down payments. The minimum down payment for a home depends on the purchase price.


For homes with a purchase price of $500,000 or less, the minimum down payment is 5% of the purchase price. For homes that are over $500,000 and up to $1 million, you'll need 5% on the first $500,000 and 10% on the remaining amount.


How Much Money Do You Need to Buy a House in Victoria?



Now, let's zoom in on different parts. You'll need a good chunk of change in beautiful Victoria, British Columbia, where the ocean meets the city. The real estate market here can be competitive, with average home prices well above the national average. So, prepare to save up a bit more for your down payment. However, this will ultimately come down to your down payment, your financing capacity, and your needs. For most first-time home-buyers, the first step is to get into a 1-2 bedroom condo, and then rely on equity built over time to eventually sell and purchase a bigger home. Here are a few examples based on current local prices in February 2026:


Victoria Condo:

  • Benchmark price = $478,800

  • Minimum downpayment: 5% = $23,940


Langford Townhome:

  • Benchmark price = $718,500

  • Minimum downpayment: 5% first $500k + 10% remainder = $46,850

East Saanich Single Family Home:

  • Benchmark price = $1,272,700

  • Minimum downpayment: 5% first $500k + 10% remainder = $102,270


Remember: these are just examples based on the minimum down payment requirement and current home prices. Actual individual down payment requirements can vary greatly, based on things like current home prices, interest rates, and factors that impact your financing (i.e. household income, credit history, income source, etc.)


So How do I get started?



As a first-time home buyer, this will depend on a few factors:

  • How much do you have saved already?

  • Where is your career at, and how much can you afford monthly?

  • Are you ready to purchase and settle in one city, or are you still figuring out where you're going to land?

  • Do you have help from friends/family, if you don't already have enough saved up?


With this in mind, first-time buyers will generally want to take a similar approach:


Steps for Buying Your First Home


  1. Determine:

    1. When you want to purchase?

    2. Where you want to live?

    3. and most importantly why you want to buy?


  • This is important, because you want to ensure you have a good reason to purchase (what is motivating you?), determine approximately when you would want to be in your new home, and confirm where you would be comfortable living for at least the next 3-5 years (long enough that your home value should go up in value giving you more options if you decide to sell or move).


  1. Make a plan for how you intend to save up a down payment


  • This might be as simple as figuring out how much you can save each year and how long it will take you.

  • It might also involve talking to friends and family


  1. Talk to a local Realtor and a Mortgage Professional


  • A local Realtor can give you a bird's eye view of what's available in the market, how much it costs, what you could potentially afford, and what you'll generally need to save up to make that happen.

  • A Mortgage professional will take this a step further and tell you how much you can afford in terms of how much you might be allowed to borrow, and exactly how much you personally will need to provide as a down payment based on your unique finances


  1. Leverage Available Programs to Help You Save Faster!


  • The FHSA helps you to save faster by reaping income tax deductions and avoiding taxes on eligible investment growth from FHSA invested funds.

  • The HBP program also lets you withdraw funds from your RRSP to put toward your down payment without facing a tax penalty.



From Money in the Bank to a Key in the Door


So, there you have it, folks. It's all about determining your why/where/when, and then getting that key in the door by engaging the right experts, understanding your minimum down payment requirement, making a plan, and speeding up your savings through programs like the FHSA and HBP.


Remember, homeownership is a journey, and it's different for everyone. Whether you're aiming for a condo in downtown Toronto or a cozy house in the Maritimes, financial planning and the right tools can help you achieve your dream of owning your first home in this beautiful country.


So, save diligently, explore your options, and step into homeownership with confidence when the time is right. It's not just about buying a house; it's about making a home.


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I am a Victoria-based local realtor with eXp Realty. My commitment to honesty, integrity, loyalty, and hard work have been essential pillars for me because they drive a high standard of excellent service for my clients. Helping you realize your dream is my goal!


I service Vancouver Island, but my focus is on Victoria, Sooke, Saanich, Malahat, Shawnigan Lake, Cobble Hill, Duncan, and the rest of the Cowichan Valley.



 
 
 

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