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FHSA and the Home Buyers’ Plan: Using Both for Your Down Payment

Saving a down payment is the hardest part of buying a first home. Two federal programs — the First Home Savings Account and the RRSP Home Buyers’ Plan — let you do it with pre-tax dollars, and you can use both for the same purchase. Here is how each one works and how to combine them.

October 3, 2026 9 min read

Who counts as a first-time home buyer?

For both programs, you are generally a first-time buyer if, at any point in the current calendar year or the previous four calendar years, you did not live in a home that you owned or jointly owned — or one owned by your current spouse or common-law partner. That means someone who sold a home five or more years ago can qualify again. The exact tests differ slightly between the two programs, so check the Canada Revenue Agency's guidance for your situation.

The First Home Savings Account (FHSA)

The FHSA combines the best features of an RRSP and a TFSA. Contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a first home are tax-free like a TFSA. Investment growth inside the account is never taxed if it is used for a qualifying purchase.

Key limits

  • Annual contribution limit: $8,000. Lifetime limit: $40,000.
  • Unused room carries forward, but only up to $8,000 — so the most you can contribute in any one year is $16,000.
  • Contribution room only starts accumulating in the year you open the account. Opening one early, even with a small deposit, starts the clock.
  • The account can stay open for up to 15 years, or until the end of the year you turn 71, whichever comes first.
  • If you never buy, the balance can be transferred to your RRSP or RRIF without tax and without using RRSP contribution room.

Why the deduction matters

You do not have to claim the deduction in the year you contribute. If you expect a higher income later, you can carry the deduction forward to a year when it saves you more tax — while the money keeps growing tax-free in the meantime.

The RRSP Home Buyers' Plan (HBP)

The Home Buyers' Plan lets you withdraw money from your RRSP to buy or build a qualifying home without paying tax on the withdrawal. Unlike the FHSA, it is effectively an interest-free loan to yourself: the amount must be paid back into your RRSP.

  • Withdrawal limit: $60,000 per person (for withdrawals made after April 16, 2024). A couple buying together can withdraw up to $120,000 combined.
  • Repayment is spread over 15 years. Any annual repayment you skip is added to your taxable income for that year.
  • For withdrawals made between January 1, 2022 and December 31, 2025, the start of repayments was temporarily deferred to the fifth year after the withdrawal. Otherwise, repayments begin in the second year after the withdrawal.
  • Contributions must sit in your RRSP for at least 90 days before you withdraw them under the HBP, or they may not be deductible.

Using both for the same home

Since 2023, you can make a qualifying FHSA withdrawal and an HBP withdrawal for the same purchase. A single first-time buyer who has maximized both could put up to $40,000 of FHSA savings (plus investment growth) and $60,000 of RRSP savings toward a down payment; a couple could potentially double that.

If you have to choose where to put new savings, the FHSA usually comes first: the deduction is the same as an RRSP, but the withdrawal never has to be repaid. RRSP savings become the second layer, accessed through the HBP.

A sample plan for a couple

Each partner opens an FHSA and contributes $8,000 a year for five years ($80,000 combined, before growth). Both already hold RRSP savings they can withdraw through the HBP. Together with tax refunds reinvested along the way, that can put a 10% to 20% down payment within reach on many homes — and every step of the 20% target reduces the insurance premium.

Test different down payment amounts to see the minimum required, your insurance premium, and how much reaching the next tier saves.

See How Your Down Payment Affects Insurance

Other first-time buyer benefits to claim

  • First-Time Home Buyers' Tax Credit: a federal non-refundable credit on a $10,000 amount, worth up to $1,500 in tax savings, claimed on your return for the year of purchase.
  • Land transfer tax rebates: several provinces reduce or refund land transfer tax for first-time buyers. In Ontario, eligible first-time buyers can receive a refund of up to $4,000 of provincial land transfer tax, and some municipalities offer additional rebates.
  • 30-year insured amortization: first-time buyers can choose a 30-year amortization on an insured mortgage, lowering monthly payments (at the cost of more interest and a small premium surcharge).

Program details change from budget to budget. Before relying on any figure, confirm it on canada.ca or with your provincial government, and ask your lawyer which rebates they will apply for at closing.

The bottom line

Open an FHSA as soon as you think you might buy a home in the next 15 years — room only accrues once the account exists. Use it first, layer the Home Buyers' Plan on top, and claim every first-time buyer credit at tax time. Then use the affordability calculator to see what price range your savings and income support.

Run Your Numbers with Mortgage Walk

Put these ideas to work. Use the free Mortgage Walk calculator to estimate your monthly payment, visualize your amortization schedule, and compare multiple scenarios side-by-side — no sign-up required.

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