FHSA vs RRSP HBP for Your First Home

Quick answer: For a first home in Canada, use the FHSA before the RRSP Home Buyers' Plan in almost every case. The FHSA gives you a tax deduction going in and tax-free withdrawals coming out with nothing to repay, while the HBP is a loan to yourself, up to $60,000, that you must pay back to your RRSP over 15 years. You can stack both accounts for the same purchase, but max the FHSA first.

If you are trying to decide between the FHSA and the RRSP Home Buyers' Plan for your first home purchase, the answer in almost every case is: use the FHSA first.

The First Home Savings Account gives you a tax deduction on contributions going in (just like an RRSP) and tax-free withdrawals when you buy a qualifying first home (just like a TFSA). The RRSP Home Buyers' Plan (HBP) is a loan you make to yourself: you withdraw RRSP money tax-free for the home purchase, but you must repay the full amount to your RRSP over 15 years. Miss a repayment, and that year's missed amount gets added to your taxable income. The FHSA has no repayment requirement. It is a true grant of both benefits. The HBP gives you one benefit and hands you a bill.

That said, the two accounts can be used together, and for many buyers, doing both is the right move.

FHSA Basics for 2026

The FHSA was introduced in 2023. As of 2026, you can contribute up to $8,000 per year, with a lifetime maximum of $40,000. Contributions are tax-deductible. Qualifying withdrawals for a first home purchase are entirely tax-free. The account has a 15-year lifespan from the year you open it, after which unused funds must be transferred to an RRSP or RRIF or withdrawn as taxable income.

A few mechanics worth knowing:

Unused annual contribution room carries forward, but only by one year. If you contribute $5,000 in 2026, you can carry the unused $3,000 forward to 2027, but you cannot let it accumulate indefinitely the way TFSA room does. This is a meaningful difference. If you are a first-time buyer who has not opened an FHSA yet, open one now even if you can only put in a small amount. The 15-year clock starts from the year you open the account. Maxing it later does not restart anything. Every year the account sits unopened is a year of lifetime room and time that you cannot get back.

You must be a Canadian resident, at least 18 years old, and a first-time home buyer (meaning you have not owned a qualifying home in the current year or the preceding four calendar years) to open and contribute to an FHSA.

RRSP Home Buyers' Plan Basics

The HBP allows you to withdraw up to $60,000 from your RRSP for a qualifying first home purchase (as of 2024; confirm current limits with CRA at tax time). If you are buying with a partner who also qualifies, you can each withdraw $60,000, for a combined total of $120,000.

The withdrawal is not taxed at the time you take it. But you must begin repaying it to your RRSP starting the second calendar year after your withdrawal, with the full amount repaid over 15 years. Each year's repayment is a minimum of roughly one-fifteenth of the total. If you miss a year's repayment, that amount is added to your income for that year and taxed accordingly. I cover the whole plan, including the 90-day rule and the purchase deadlines, in the RRSP Home Buyers' Plan guide.

Here is the part that does not get said clearly enough: the HBP repayment competes with your regular RRSP contributions. The TFSA vs RRSP guide covers how these accounts fit together more broadly, which is worth understanding before you start drawing from either one. Every dollar you put back into your RRSP to satisfy the HBP repayment is a dollar not going toward fresh contribution room. You are essentially paying yourself back for the next 15 years instead of growing your retirement savings. The FHSA does not do this to you.

The Stack: Using Both Accounts for the Same Home

You can use your FHSA and the RRSP HBP for the same home purchase. This is the strategy worth knowing.

If you have maxed your FHSA ($40,000 lifetime), your RRSP has significant room, and you need additional funds for a down payment, pulling from the HBP on top of your FHSA withdrawal is entirely legal and can make a real difference. A couple who has both maxed their FHSAs and uses the HBP could potentially access $40,000 + $40,000 + $60,000 + $60,000 = $200,000 for a down payment before any other savings are considered.

The order of operations matters: max the FHSA first. Only reach for the HBP after you have used your FHSA room.

When HBP Alone Still Makes Sense

There are situations where the HBP is the better or only tool:

You opened your RRSP years before the FHSA existed (pre-2023) and have significant savings sitting there already. The FHSA did not exist before April 2023, so anyone who has been diligently saving in an RRSP since their twenties may have far more accessible capital there than in an FHSA. In that case, the HBP may be the practical bridge.

You have already used your full FHSA room and still need more for the down payment. In that case, the HBP is the logical next step.

You are not eligible to open an FHSA (for example, you have owned a home recently and do not qualify as a first-time buyer). The HBP has its own eligibility rules, but it has been around longer and there are more people with RRSP room to access.

One Thing to Do Right Now

If you have not opened an FHSA yet and you think you might buy a home in the next 5 to 15 years, open one this week. You do not have to max it immediately. Deposit whatever you can. The contribution room accumulates from the year the account is open, and the 15-year clock starts from that same year. Waiting costs you room and time you cannot recover. Most major Canadian banks and brokerages now offer FHSAs. It takes less than 30 minutes to open one online. Once it is open, our FHSA planner can show you what your contributions could grow to by your target purchase year.

If you are not sure whether you still qualify as a first-time buyer for FHSA purposes, check with your financial institution or a qualified financial planner. The definition has some nuance around the four-year look-back period.

Which account you use affects the freedom you carry into the next decade, whether or not you treat owning a home itself as some kind of spiritual milestone.

If you are still working through whether now is the right time to buy, the Christian homebuying guide covers the full decision, including what the rent-vs-buy calculation actually looks like in Canada. Once that is settled, the homebuying process guide walks the accounts, the nine steps, and the closing costs.

This article is for educational purposes only and does not constitute financial or tax advice. Confirm current limits and eligibility rules with CRA or a qualified Canadian financial professional before making decisions.