FHSA vs RRSP Home Buyers’ Plan
Compare Canada’s two main programs for saving for your first home down payment.
Quick Comparison
| Feature | FHSA | RRSP HBP |
|---|---|---|
| Maximum withdrawal | $40,000 | $60,000 |
| Annual contribution | $8,000 | Any amount |
| Tax deduction | Yes | Yes |
| Withdrawal taxed | No | No (if repaid) |
| Repayment required | No | Yes (15 years) |
| Carry-forward room | $8,000/year | Unlimited |
| Account deadline | 15 years or age 71 | None |
| Winner | Better terms | Larger amount |
Side-by-Side Analysis
Tax Deduction
| Factor | FHSA | RRSP |
|---|---|---|
| Contribution deductible | Yes | Yes |
| Can defer deduction | Yes | Yes |
| Reduces current taxes | Yes | Yes |
| Result | Same | Same |
Withdrawal for Home
| Factor | FHSA | RRSP HBP |
|---|---|---|
| Tax on withdrawal | None | None |
| Limit per person | $40,000 | $60,000 |
| Couple combined | $80,000 | $120,000 |
| Result | Limited | More room |
After Purchase
| Factor | FHSA | RRSP HBP |
|---|---|---|
| Repayment required | No | Yes |
| Repayment period | N/A | 15 years |
| Miss repayment | N/A | Added to income |
| Result | Winner | Burden |
Dollar-for-Dollar Comparison
Scenario: $50,000 in Each Account
FHSA Path:
| Year | Action | Account Balance | Tax Paid |
|---|---|---|---|
| 1-6 | Contribute $8K/year | $48,000 | -$12,000 deductions |
| 7 | Withdraw for home | $0 | $0 tax |
| Total benefit | $12,000 saved |
RRSP HBP Path:
| Year | Action | Account Balance | Tax Impact |
|---|---|---|---|
| 1-6 | Contribute $8K/year | $48,000 | -$12,000 deductions |
| 7 | Withdraw $48K for home | $0 | $0 tax |
| 8-22 | Repay $3,200/year | Repaying | Must repay or taxed |
| Net | $12,000 saved, but must repay |
The Repayment Burden
If you withdraw $60,000 from RRSP via HBP:
| Year | Repayment Due | Cumulative |
|---|---|---|
| Year 1 | $4,000 | $4,000 |
| Year 5 | $4,000 | $20,000 |
| Year 10 | $4,000 | $40,000 |
| Year 15 | $4,000 | $60,000 |
Miss a payment? That year’s $4,000 becomes taxable income (costing ~$1,200-$1,600 in tax).
Optimal Strategy: Use Both
Maximum Down Payment (Single Person)
| Source | Amount |
|---|---|
| FHSA | $40,000 |
| RRSP HBP | $60,000 |
| Total | $100,000 |
Maximum Down Payment (Couple)
| Source | Person 1 | Person 2 | Total |
|---|---|---|---|
| FHSA | $40,000 | $40,000 | $80,000 |
| RRSP HBP | $60,000 | $60,000 | $120,000 |
| Total | $100,000 | $100,000 | $200,000 |
Priority Order
- FHSA first — no repayment, pure benefit
- RRSP HBP second — for additional funds needed
- Regular savings — if more still needed
Timeline Strategy
If Buying in 3 Years
| Year | FHSA | RRSP |
|---|---|---|
| Year 1 | $8,000 | $8,000 |
| Year 2 | $8,000 | $8,000 |
| Year 3 | $8,000 | $8,000 |
| Total | $24,000 | $24,000 |
| Withdrawal | $24,000 (no repay) | $24,000 (must repay) |
If Buying in 5+ Years
| Strategy | FHSA | RRSP |
|---|---|---|
| Max FHSA | $40,000 | — |
| Then RRSP | — | As needed |
| Focus | FHSA priority | Supplementary |
Special Situations
High Income Now, Lower Later
- FHSA: Deduct now when marginal rate is high
- RRSP: Consider deducting later if rate will be similar
Already Have RRSP Balance
- Can use existing RRSP for HBP immediately
- FHSA requires new contributions
Might Not Buy
| If You Don’t Buy | FHSA | RRSP |
|---|---|---|
| Transfer option | To RRSP tax-free | Already in RRSP |
| Withdraw non-qualifying | Taxable | Taxable + withholding |
| Flexibility | Must use in 15 years | No deadline |
Decision Flowchart
Do you have FHSA room?
- Yes → Contribute to FHSA first
- Maxed out → Use RRSP HBP
Need more than $40K down payment?
- Yes → Use RRSP HBP for remainder
- No → FHSA sufficient
Can afford HBP repayments?
- Yes → HBP is fine
- No → Stick to FHSA only
Tax Refund Strategy
| Action | Result |
|---|---|
| Contribute $8K to FHSA | ~$2,400 refund (30% bracket) |
| Apply refund to mortgage | Saves interest |
| Or reinvest refund | Compound growth |
How to use FHSA and HBP together
The FHSA and RRSP HBP are complementary — you can use both for the same home purchase:
Total first-time buyer down payment potential:
- FHSA lifetime limit: $40,000 (plus investment growth, tax-free)
- RRSP HBP maximum: $35,000 per person ($70,000 for couples)
- Combined maximum per individual: $75,000+
- Combined maximum for couple: $150,000+ (both people’’s FHSA + HBP)
Optimal strategy:
- Prioritize FHSA first — contributions are both tax-deductible (like RRSP) AND withdrawals are tax-free (unlike HBP, which requires repayment). It is strictly better than RRSP HBP from a tax efficiency standpoint.
- Use RRSP HBP to supplement if you still need more down payment funds after maxing FHSA
- Remember: RRSP HBP withdrawals must be repaid over 15 years (starting the 2nd year after withdrawal). FHSA withdrawals have no repayment requirement.
Frequently asked questions
Can I open an FHSA if I already used the Home Buyers’’ Plan? No. The FHSA is only available to first-time home buyers — defined as someone who has not owned a qualifying home in the current year or in any of the preceding 4 calendar years. If you used the HBP and have since owned a home, you are not eligible for the FHSA unless you meet the first-time buyer definition again (e.g., after a long period of renting).
What happens to my FHSA if I never buy a home? You can hold an FHSA for up to 15 years or until age 71 (whichever comes first). After that, you must transfer the funds to an RRSP or RRIF (tax-free transfer, preserving the tax-deferred status) or withdraw the funds (taxable). You do not lose the money — you just lose the special first-time-buyer tax-free withdrawal treatment.
Is FHSA available at all Canadian financial institutions? As of 2026, FHSA accounts are offered by all major banks (RBC, TD, BMO, Scotiabank, CIBC, National Bank), credit unions, and many online institutions (Wealthsimple, EQ Bank, Questrade). You can hold an FHSA at more than one institution, but your total annual contributions across all accounts cannot exceed $8,000.