For most Canadian first-time buyers, the strongest plan is an FHSA for new tax-free savings plus the Home Buyers’ Plan for RRSP money you already hold. The FHSA allows $8,000 a year and $40,000 for life, and the HBP lets you withdraw up to $60,000 from your RRSP in 2026. You can combine both for the same qualifying home when you meet each program’s conditions.
TL;DR:
- Both programs require that neither you nor your spouse or common law partner owned a principal residence this year or during the previous four years.
- Open an FHSA early: its clock starts immediately and ends at the 15th anniversary, at age 71, or the year after your first qualifying withdrawal.
- An RRSP to FHSA transfer counts toward both FHSA contribution limits and creates no new room, so check your available space before moving funds.
- HBP withdrawals are capped at $60,000 in 2026, with up to 15 years for repayment; first withdrawals from 2026 to 2028 get a five year delay.
- If you miss an HBP repayment, the unpaid amount is added to your taxable income for that year; designate eligible RRSP contributions on Schedule 7.
Table of Contents
- How do the FHSA and the Home Buyers’ Plan compare side by side?
- How does the FHSA work for a down payment?
- How does the Home Buyers’ Plan work with your RRSP?
- Can you use the FHSA and the HBP together?
- Which approach fits your situation? Three buyer scenarios
- Who counts as a first-time buyer, and what dates matter?
- What are the tax and repayment consequences to plan for?
- How do you make withdrawals and repayments step by step?
- Why does coordination matter for Calgary mortgages?
- How do we help you coordinate your FHSA and HBP with a pre-approval?
- FAQ
- Sources
How do the FHSA and the Home Buyers’ Plan compare side by side?
| Feature | FHSA | HBP (RRSP withdrawal) |
|---|---|---|
| Limits | $8,000 a year, $40,000 lifetime | Up to $60,000 withdrawn (2026) |
| Tax treatment | Contributions deductible, qualifying withdrawals tax-free | Withdrawal not taxed if repaid on schedule |
| Repayment | None | Over a maximum of 15 years |
| Eligible use | Buying or building a qualifying first home | Buying or building a qualifying home |
| Transfers | RRSP transfers count toward FHSA limits | Funds must sit in an eligible RRSP |
| Best for | New savings with no repayment burden | Tapping RRSP savings you already have |
- No repayment is the FHSA advantage. Qualifying withdrawals never come back to the CRA.
- The HBP gives you access to RRSP funds you already hold. That makes it the faster route when your savings are mostly in an RRSP.
- Confirm your first-time buyer status first. Both programs apply the same ownership test, covered below.
How does the FHSA work for a down payment?
The Canada Revenue Agency sets the FHSA at $8,000 a year and $40,000 lifetime. Contributions are tax-deductible, and qualifying withdrawals for a first home are tax-free with no repayment.
- Your participation period ends on the earliest of the 15th anniversary of opening your first FHSA, the year you turn 71, or the year after your first qualifying withdrawal, as the CRA explains when closing your FHSA.
- Opening an account starts that clock, even with a small first deposit.
- Moving money from an RRSP into an FHSA is allowed, but transfers into your FHSA count toward your annual and lifetime limits and create no new room.
Pro Tip: Open your FHSA as soon as you qualify, even with a small deposit, so your participation period and contribution room start building.
For Alberta-specific examples, see our guide to FHSA down payment rules for first-time buyers in Alberta.
How does the Home Buyers’ Plan work with your RRSP?
The HBP lets you take RRSP money out for a first home without paying tax on the withdrawal, as long as you repay it. The 2026 limit is $60,000, and repayment runs over a maximum of 15 years. The CRA adds that first withdrawals made between 2026 and 2028 get a five-year grace period before repayment starts, per the HBP overview.
- You request the withdrawal on Form T1036 through your RRSP issuer.
- Locked-in and some group RRSPs may not allow HBP withdrawals, so check with the issuer, as noted in the CRA’s guide to HBP eligibility and withdrawals.
- You repay by designating RRSP contributions to Schedule 7, and the CRA sends an annual statement showing your balance.
Our breakdown of the RRSP Home Buyers’ Plan withdrawal limit in Alberta for 2026 goes deeper on the numbers.
Can you use the FHSA and the HBP together?
Yes. The CRA confirms you can use both for the same qualifying home as long as you meet each program’s conditions at the time of each withdrawal. The CRA’s first-home savings guidance describes the pairing plainly: the FHSA offers tax-free growth and withdrawals with no repayment, while the HBP puts existing RRSP savings to work in exchange for a repayment commitment.
- Open your FHSA and contribute up to your available room each year.
- Keep RRSP funds in place until you have a firm purchase timeline.
- Plan any RRSP-to-FHSA transfer carefully, because it uses FHSA room.
- Time your HBP withdrawal and FHSA withdrawal to your closing date.
- Map your HBP repayments against expected income before you commit.
Pro Tip: Run your numbers before transferring RRSP money into an FHSA, since a transfer uses your annual and lifetime FHSA room without adding any.
Which approach fits your situation? Three buyer scenarios
- The starter saver. You have little in an RRSP, so an FHSA is usually the first move. Contributions reduce your taxable income, and the withdrawal never needs repaying. A buyer eyeing a condo in Beltline or Mission can build a down payment this way.
- The RRSP holder. You have years of RRSP savings. The HBP lets you use them toward a home in a place like Airdrie, Cochrane or Chestermere, with a repayment plan built around your budget.
- The combined buyer. Put new savings into the FHSA and use the HBP for your existing RRSP balance, then line up both withdrawals with your closing date.
Your next steps are the same in every case: open an FHSA at a Canadian financial institution, check whether your RRSP allows HBP withdrawals, and get a mortgage pre-approval.
If you are renovating after purchase, design-build versus design-bid costs are worth understanding before you finalize your budget.
Who counts as a first-time buyer, and what dates matter?
The CRA’s first-time buyer test is the same logic in both programs: neither you nor your spouse or common-law partner has owned a home as a principal residence in the current year or the previous four years.
- The FHSA window closes on the earliest of its 15th anniversary, your 71st birthday, or the year after your first qualifying withdrawal.
- For the HBP, you must buy or build a qualifying home and keep your documentation, including your T1036 and purchase agreement.
- Keep copies of every form you file, since lenders and the CRA may ask for them.
What are the tax and repayment consequences to plan for?
Missing an annual HBP repayment has a direct cost. As the CRA explains in its guide to repaying HBP withdrawals, the amount you did not repay is added to your taxable income for that year.
- Only certain RRSP contributions can be designated as HBP repayments on Schedule 7.
- The CRA issues annual HBP statements so you can track your remaining balance.
- Direct transfers from an FHSA to an RRSP or RRIF carry no immediate tax if the conditions are met, while non-direct withdrawals can be taxable.
- Reporting touches Schedule 7, Schedule 15 and forms RC721 and RC727, so involve your tax preparer early.
Missed HBP repayments are added to your taxable income, so a repayment plan matters as much as the withdrawal itself.
How do you make withdrawals and repayments step by step?
- Contact your RRSP issuer and complete Form T1036 before you withdraw, following the CRA’s steps to participate in the HBP.
- Confirm your purchase qualifies and gather your documents.
- Designate repayment contributions on Schedule 7 each year.
- For an FHSA move to an RRSP or RRIF, request a direct transfer using the CRA forms rather than a cash withdrawal.
Why does coordination matter for Calgary mortgages?
Timing is where plans break. When your FHSA withdrawal, HBP funds and mortgage pre-approval do not line up, you can reach financing day with a gap in your down payment. Calgary prices and lender requirements shape how much you need, and that target looks different in Cochrane than in the inner city. Bring your numbers to a conversation early and we will build a plan around them.
— Guriqbal Chahal, MBA, PMP
How do we help you coordinate your FHSA and HBP with a pre-approval?
We help first-time buyers across Calgary, Airdrie and Cochrane turn savings rules into a working down payment plan. Our team handles first-time buyer mortgages and pre-approval, and we help you time withdrawals, plan HBP repayments and choose lenders that accept your documentation. Call Guriqbal Chahal, MBA, PMP, Mortgage Broker at 403-966-6072, or start with our first-time buyer page or Google Business Profile.
This article is general information, not a substitute for advice from a qualified financial advisor. Consult a qualified financial professional about your own circumstances before acting on anything here.
FAQ
Can I use my RRSP to buy a house in Canada?
Yes. The Home Buyers’ Plan lets eligible first-time buyers withdraw RRSP funds toward a qualifying home without tax on the withdrawal. You repay the amount over time, and missed repayments are added to your income.
Can I use the FHSA and HBP for the same home?
Yes, as long as you meet each program’s conditions at the time of each withdrawal. The first-time buyer test applies to both.
Is Canada’s pension plan the same as an RRSP?
No. The Canada Pension Plan is a government retirement benefit funded through payroll contributions, while an RRSP is a personal registered savings account you control. Only the RRSP can be used for the HBP.
Which is better for a down payment, the FHSA or the RRSP?
For new savings, the FHSA is often stronger because withdrawals need no repayment. The RRSP route makes sense when you already hold RRSP funds you can withdraw under the HBP.
