FHSA vs HBP: The Differences and How to Use Both for One Home

The First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP) both put registered savings toward a first home, but they work differently: an FHSA withdrawal is a tax-free payout that is never repaid, while an HBP withdrawal is a loan from your own RRSP that has to go back in. CRA lets you use both for the same home. This page compares the two and sets out how to combine them. The FHSA side is covered in full in the FHSA guide and the FHSA guides directory; the HBP itself is covered in the Home Buyers’ Plan guide.

FHSA vs HBP: side by side

Both programs require a written agreement to buy or build a qualifying home at the time of the withdrawal, Canadian residency, and the intention to live in the home within a year of buying or building it. The FHSA conditions in detail are on FHSA withdrawal rules, and which properties count is on qualifying home and first-time buyer rules. For the HBP, CRA notes that a mortgage pre-approval is not a written agreement.

How much you can access

The FHSA figure is a contribution cap, not a withdrawal cap: investment growth inside the account comes out tax-free as well. The HBP figure is the most you can withdraw, and only if your RRSP holds that much. How a couple coordinates two FHSAs is covered in the FHSA for couples.

The repayment difference

The practical gap between the two is repayment. On a full $60,000 HBP withdrawal, the minimum repayment is the same every year:

A required repayment that isn’t made is added to your income for that year. At a 33% marginal rate, skipping one $4,000 instalment costs about $1,320 in tax.

Repayments normally start in the 2nd year after the withdrawal year. Under CRA’s temporary relief, a first HBP withdrawal made by December 31, 2028 starts repayment in the 5th year after instead; a first withdrawal made this year has its first repayment year in 2031. The schedule and what counts as a repayment are on HBP repayment rules.

A qualifying FHSA withdrawal has no repayment at all, while every HBP dollar comes with a repayment schedule. The other side of that is that repaying the HBP rebuilds retirement savings that would otherwise stay spent.

Using both for the same purchase

The two withdrawals are separate requests, one to your FHSA issuer and one to your RRSP issuer, even if both accounts are at the same institution. You can withdraw from your RRSPs under the Home Buyers' Plan and make a qualifying withdrawal from your FHSAs for the same qualifying home, as long as you meet all of the conditions of each at the time of each withdrawal; the qualifying FHSA withdrawal is never repaid and, unlike HBP participation, can't be cancelled once made.

1. Sign the written agreement to buy or build the home.
2. Request the FHSA withdrawal with Form RC725. It can be made before closing, or no more than 30 days after you acquire the home.
3. Request the HBP withdrawal with Form T1036. Money contributed to the RRSP in the 89 days before this withdrawal may not be deductible, so recent contributions are usually left in place for 90 days first.
4. Close on the home before October 1 of the year after the withdrawal and occupy it, or intend to occupy it, as your main home within a year of buying it.
5. At tax time, neither withdrawal is taxable. The HBP balance starts its repayment schedule; the FHSA must close by December 31 of the year after your first qualifying withdrawal, or earlier if the year of the 15th anniversary of opening your first FHSA or the year you turn 71 comes first, as explained on what happens to your FHSA if you never buy.

Existing RRSP savings vs new FHSA savings

The HBP draws on money you already have in an RRSP, so someone with a large RRSP can use it without new saving. The FHSA only holds what you put in after opening it, at up to $8,000 of room a year, which is why its value depends on when you open it. Both give a deduction on the way in, since RRSP and FHSA contributions are both deductible. When you are choosing where the next dollar goes before a purchase, FHSA vs TFSA vs RRSP sets out the order by situation.

If the purchase doesn’t happen

Here the two part ways again. RRSP savings you never took out under the HBP stay where they are, with nothing to undo. Unused FHSA savings have a deadline instead: before the account’s participation period runs out, they can be rolled into an RRSP or RRIF with no tax and no effect on your RRSP room. It is a direct transfer between the institutions, made with Form RC721 or the institution's own document. The details are on what happens to your FHSA if you never buy.

Related guides

• The Home Buyers’ Plan explained
• HBP repayment rules
• HBP calculator
• First-time home buyer programs in Canada
• What CMHC mortgage insurance is