The tax-free savings account, or TFSA, is an attractive opportunity for investors to accumulate tax-free investment income. The cumulative TFSA contribution limit in 2026 is now $109,000, depending on your age. Every year, this number keeps increasing, and the new TFSA room in 2026 totaled $7,000.
That’s a significant increase, one that might make you wonder how to turn this new TFSA contribution into monthly passive income. In this article, I have two suggestions for you to consider for $34.50 in monthly passive income, or $414.00 in annual passive income.
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Northwest Healthcare Properties: A 6.4% yield for TFSA monthly income
Northwest Healthcare Properties REIT (TSX:NWH.UN) is an owner of a portfolio of healthcare properties, with properties such as hospitals, medical buildings, specialty clinics and more. This portfolio spans eight countries and is highly diversified within the healthcare and wellness space.
I’m recommending this stock as a leading candidate for the $7,000 TFSA contribution in 2026 for a few reasons. First of all, Northwest’s business is one that should result in cash flows that are highly predictable and stable. This is a function of the fact that healthcare properties are very much in-demand – and the aging population should keep this going strong. Healthcare assets are characterized by long leases and they’re very sticky. The average weighted average lease expiry is currently 13.4 years, and Northwest’s occupancy rate is a solid 96.9%.
Secondly, Northwest’s financial results and health have been greatly improving as of late. In the REIT’s latest quarter, its adjusted funds from operations increased 16% to $0.11 per share. This puts its dividend payout ratio at 85%, compared to 99% in the same period last year. Also, the company’s balance sheet is improving. Long-term debt is down 17% versus last year, to $2.4 billion.
These factors contribute to making Northwest Healthcare Properties a top choice for your 2026 TFSA contribution. The stock delivers a monthly dividend payment and a 6.4% dividend yield. This monthly passive income stock is best suited for a TFSA, as this will shelter these payments from taxes.
Peyto Exploration and Development: A 5.5% yield
Another stock to consider is Peyto Exploration and Development Corp. (TSX: PEY). Peyto also pays monthly dividends and is well-suited for the new $7,000 TFSA contribution. Currently yielding 5.5%, Peyto is well-positioned to provide its shareholders with reliable monthly passive income.
Peyto is one of Canada’s lowest cost natural gas producers. The company operates in the very lucrative deep basin of Alberta, with long-life and low-cost reserves. This helps Peyto keep costs down, and production up.
Looking ahead, Peyto is set to benefit from what I expect will be a very positive natural gas market. The company has already been benefitting from positive fundamentals, but with the ramping up of LNG Canada, we could be in for some major upward movements in natural gas prices.
In the last year, the U.S. NYMEX natural gas price has increased 52% to $5.275. Similarly, Canadian AECO natural gas prices have increased 75% to $2.00. While some of this movement is due to the recent cold weather we have been experiencing, other long-term forces are also at work. They include the growth in global LNG demand, as well as the growth in demand that’s expected from data centres and utilities to support the electrification of the energy grid.
The bottom line
Both Northwest Healthcare Properties and Peyto Exploration are strong options to consider for the new $7,000 TFSA contribution room in 2026, and to make full use of your TFSA contribution limit in 2026. These stocks provide a reliable and likely growing monthly passive income stream, with yields of 6.4% and 5.5% respectively.
As you can see from the table below, if you invest the new $7,000 contribution room evenly between the two stocks, you will receive $34.50 in monthly passive income, or $414.00 in annual passive income.
