FHSA vs RRSP Home Buyers' Plan: Which Is Better in Canada?

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.

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. You take the deduction, you take the tax-free withdrawal, and then you are finished with it. The HBP gives you one of those two and fifteen years of paying yourself back.

The two accounts can still be used together, and for a lot of buyers that 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 does not run forever, and the deadline that catches most buyers is not the one they expect. Your FHSA closes on December 31 of the year in which the first of three things happens: the 15th anniversary of opening it, the year you turn 71, or the year after you make your first qualifying withdrawal. That last one is the one that applies to you. Buy a house in March and your FHSA has until the end of the following December, whatever is left in it. Anything not withdrawn by then has to move to an RRSP or a RRIF, or come out as taxable income.

A few mechanics worth knowing:

Unused contribution room carries forward, but the carry-forward is capped at $8,000. It does not pile up the way TFSA room does. Contribute $5,000 in 2026 and the unused $3,000 rolls into 2027, giving you $11,000 of room that year. Skip a year entirely and you do not get $24,000 the year after, because the carried amount can never exceed $8,000. The most you can ever put into an FHSA in one calendar year is $16,000, and room above that carry-forward cap is gone for good.

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 and under 71, 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. That limit has been $60,000 since April 2024 and still stands for 2026. 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.

One exception is worth checking before you plan around that timeline. A temporary federal measure defers the start of the repayment period by three additional years for anyone whose first HBP withdrawal fell between January 1, 2022 and December 31, 2025, so repayments begin in the fifth year after the withdrawal rather than the second. If you already pulled money out during that window, confirm your own start year in your CRA account instead of counting forward from the standard rule. I cover the whole plan, including the 90-day rule, the purchase deadlines, and how the two accounts stack together, in the section above.

The HBP repayment competes with your regular RRSP contributions, and that rarely gets said clearly. 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 spend the next 15 years catching up to where you already were. 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.

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.