Eighty-one percent of mortgage consumers surveyed by CMHC in 2026 said they believe homeownership is a good long-term financial investment. But reaching this important financial milestone can feel impossible without a solid savings plan.<\/p>
Thankfully, in 2023, the federal government introduced First Home Savings Accounts (FHSAs), which provide tax-deductible contributions of up to $40,000 and tax-free qualifying withdrawals for Canadian first-time homebuyers.<\/p>
Saving in an FHSA involves more than regularly setting aside money. To fully benefit from the account, keep these key points in mind.<\/p>
There are a few foundational rules and limits to be aware of when using an FHSA:<\/p>
The beauty of FHSA contributions is that they\u2019re fully tax-deductible, like an RRSP. So, saving strategically can lower the income tax that prospective homebuyers owe to the CRA.<\/p>
Furthermore, reinvesting your tax refunds back into an FHSA can accelerate its growth.<\/p>
First-time homebuyers who have three years or more to save may want to grow their FHSA deposits by investing in growth equities, which can experience short-term fluctuations but often come out ahead in the long run.<\/p>
Buyers with a shorter time frame in mind (i.e. two years or less) may want to focus on capital preservation by investing in lower-risk assets like GICs and money market funds.<\/p>Some popular examples of growth equity investments include major technology stocks, such as NVIDIA (NVDA) or Amazon.com (AMZN), or growth funds, such as the Vanguard Morningstar Growth ETF (VUG) or the iShares Russell 1000 Growth ETF (IWF).<\/div><\/article>