FHSA vs. RRSP Home Buyers' Plan: Which Is Better (2026)?

Canada gives first-time buyers two powerful, tax-advantaged ways to fund a down payment: the First Home Savings Account (FHSA) and the RRSP Home Buyers' Plan (HBP). They sound similar but behave very differently — and for most people the best answer is to use both. Here's how to decide.

The short answer

The FHSA is usually the better first choice: contributions are tax-deductible and qualifying withdrawals are tax-free, with nothing to pay back. The RRSP Home Buyers' Plan lets you withdraw up to $60,000 tax-free too, but you must repay it to your RRSP over 15 years. Best of all, you can combine them — and you should, if you can. Here is what an FHSA RRSP HBP stacked mortgage looks like in practice.

The FHSA in brief

• Contribution room: $8,000 per year, up to a $40,000 lifetime maximum.
• Tax treatment: contributions are tax-deductible (like an RRSP) and qualifying first-home withdrawals are tax-free (like a TFSA) — the best of both.
• Repayment: none. The money is yours to use, tax-free, for a first home.
• Growth: investments inside grow tax-free.

The RRSP Home Buyers' Plan in brief

• Withdrawal limit: up to $60,000 per person from your RRSP, tax-free at the time of withdrawal.
• Repayment: required — you repay it to your RRSP over 15 years, or the unpaid portion is added to your income and taxed.
• Best for: people who already have significant RRSP savings to tap.

FHSA vs. HBP — the key differences

• Repayment: FHSA = none. HBP = repay over 15 years. This is the biggest practical difference.
• New vs. existing savings: the FHSA is money you set aside going forward; the HBP unlocks RRSP money you already have.
• Tax on the way out: both are tax-free for a qualifying first home — but the HBP is really a loan from yourself.

Why "both" usually wins

The FHSA and HBP can be used together on the same purchase, stacking up to $40,000 (FHSA) plus $60,000 (HBP) per person — and double that for a couple. The typical playbook: max the FHSA first (deduction now, tax-free and repayment-free later), then add the HBP if you need more and have RRSP savings. A couple buying together can assemble a very large tax-advantaged down payment this way. See how it fits the bigger picture in the first-time buyer guide.

How this affects your mortgage

A bigger down payment from the FHSA/HBP lowers your mortgage, your CMHC insurance premium (or removes it at 20%), and your monthly payment. Model the impact with the payment calculator and the CMHC calculator, then confirm your down payment target.

Frequently asked questions

Can I use the FHSA and Home Buyers' Plan together?

Yes. They can be combined on the same first-home purchase, letting you stack FHSA savings (up to $40,000) with an HBP withdrawal (up to $60,000) per person.

Is the FHSA better than the RRSP Home Buyers' Plan?

For most first-time buyers, yes — FHSA withdrawals are tax-free with no repayment, while the HBP must be repaid to your RRSP over 15 years. The HBP shines when you already have RRSP savings to use.

How much can I contribute to an FHSA?

$8,000 per year up to a $40,000 lifetime maximum, with unused annual room carrying forward (subject to the rules). Contributions are tax-deductible.

Do I have to pay back an FHSA withdrawal?

No. Unlike the Home Buyers' Plan, qualifying FHSA withdrawals for a first home are tax-free and never repaid.

Building your down payment? Talk to us — we'll help you sequence the FHSA and HBP and show how the bigger down payment changes your mortgage.