You've been saving for a few years toward a first home. Someone mentioned the HBP, someone else the FHSA, and you're not sure whether to pick one, the other, or both. Short answer: in most cases, both. Here's the long version with 2026 figures and the traps to avoid.
The two tools, in one sentence each
- HBP (Home Buyers' Plan): you withdraw up to $60,000 from your RRSP (limit raised in 2024) tax-free, on the condition that you repay the amount over 15 years back into your RRSP.
- FHSA (First Home Savings Account): you contribute up to $8,000/year (cumulative cap $40,000), get a tax deduction like an RRSP, and withdraw without ever repaying and tax-free on the gains to buy a first home.
If you're a couple and both are eligible, that's a theoretical potential of 2 × ($60,000 + $40,000) = $200,000 available as a down payment — not counting the returns built up inside the accounts while you save.
What changed in 2024-2026
Three key changes to know before planning:
- HBP cap raised to $60,000 (previously $35,000) since April 2024. Withdrawals made between 2022 and 2025 also benefit from a 5-year grace period before repayment kicks in (instead of 2).
- The FHSA has existed since 2023. You may already have contributed for 2023, 2024, 2025 — meaning up to $24,000 if you opened the account early (unused room carries forward up to $8,000/year, with a yearly cap of $16,000 carried).
- The FHSA and HBP can be combined on the same purchase since 2023. Before, a borrower had to choose one or the other. No longer.
When to use the FHSA over the HBP
The FHSA wins on three fronts:
- No repayment. The HBP forces 15 years of mandatory repayments into your RRSP. Miss a payment and the unpaid amount is added to your taxable income. The FHSA, by contrast, is a definitive tax-free withdrawal.
- Immediate deduction. Like an RRSP, your FHSA contribution lowers your taxable income the year you make it. If you earn $80,000 and contribute $8,000, your tax bill drops by about $2,800 (Quebec marginal rate ~37%).
- Savings account locked for the home. You can't easily dip in for vacation — the money is mentally and fiscally earmarked for the down payment.
If you don't have much RRSP yet, start by maxing out the FHSA. If you already have a sizeable RRSP and want to leave it intact for retirement, the FHSA is also your best ally.
When the HBP becomes relevant again
The HBP regains its edge in two typical cases:
- You're buying soon (12-18 months) and already have $30-60k in your RRSP. Opening an FHSA today won't give you time to contribute $40,000 — so use the existing RRSP via the HBP.
- You want to maximize the down payment beyond $40,000 (FHSA cap). The HBP supplements above the FHSA ceiling.
In most concrete 2026 cases, we combine both: empty the FHSA first (clean tax-free gain, never to repay), then top up with an HBP withdrawal from the RRSP.
Three concrete scenarios
| Scenario | FHSA used | HBP used | Total down payment |
|---|---|---|---|
| Solo, 32, $75k income, opened FHSA in 2024 | $24,000 (3 × $8,000) | $30,000 from existing RRSP | $54,000 |
| Couple, 30 + 32, 2 × $70k, opened in 2023 | 2 × $32,000 = $64,000 | 0 (no significant RRSP) | $64,000 |
| Couple, 38 + 36, 2 × $95k, well-funded RRSPs | 2 × $40,000 = $80,000 | 2 × $60,000 = $120,000 | $200,000 |
These figures illustrate the potential — your real situation depends on past contributions, accumulated FHSA/RRSP room, and your tax strategy.
The HBP repayment trap nobody reads
No one reads the HBP fine print on signing. Here's what it says: each year, you must put 1/15 of the withdrawn amount back into your RRSP, otherwise that portion is added to your taxable income for the year. On a $60,000 withdrawal, that's $4,000/year for 15 years. If you stop contributing to your RRSP (or forget), the CRA will add $4,000 to your income — potentially $1,500 of extra tax each year.
This is precisely why the FHSA is generally preferred if you can open early and contribute gradually.
What this changes on your mortgage file
A bigger down payment has three combined effects on your file:
- Down payment ≥ 20% = no CMHC/Sagen/Canada Guaranty mortgage insurance. Savings of 2-4% of the insured amount, potentially $8-15k over the term.
- Lower loan-to-value ratio (LTV) = access to better lender products, often more favorable rates.
- Borrowing capacity better respected. The federal stress test limits what you can borrow; a larger down payment lowers the financed amount and so the pressure on that calculation.
What Courteo does
Courteo is not a broker. We connect you with a mortgage broker holding an AMF license who will look concretely at your situation: your existing HBP and FHSA accounts, your purchase timeline, and the lenders that fit your profile. Fine HBP/FHSA tax planning itself deserves a financial planner or accountant.
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Article written by the Courteo team. No information here constitutes personalized financial or mortgage advice. For that, connect with a mortgage broker holding an AMF license.