FHSA + HBP
Financial Planning · Home Buying Strategy
How to stack the FHSA and the Home Buyers' Plan to maximize your down payment
Two programs. One purchase. Here's how a client with $50,000 in RRSPs — and only $8,000 of FHSA room — can cover a full $50,000 down payment this year, entirely from registered savings.
FHSAHome Buyers' PlanRRSPFirst-time buyers
Canada's first-time home buyer programs are more powerful when used together — but most people don't realize they can be stacked. If you have RRSP savings and you're looking to buy this year, you may be able to cover your entire down payment from registered savings, even if you have only just opened your First Home Savings Account (FHSA).
Let's walk through a real example.
The scenario
A client has $50,000 in their RRSP. They haven't opened an FHSA previously, so they only have $8,000 of contribution room available for 2026. They need a $50,000 down payment to purchase their first home this year. Here's how the FHSA and the Home Buyers' Plan (HBP) work together to get them there — with no out-of-pocket cash required.
Step 1 — Open the FHSA and transfer $8,000 from the RRSP
As a first step, the client opens an FHSA. This immediately unlocks $8,000 of contribution room for 2026. Rather than making a new cash contribution, they transfer $8,000 directly from their RRSP into the FHSA — with no tax consequences. No income inclusion, no deduction, just a repositioning of existing savings.
When the home purchase closes, that $8,000 is withdrawn from the FHSA completely tax-free — and unlike the HBP, it never needs to be repaid.
Step 2 — Withdraw $42,000 from the RRSP via the Home Buyers' Plan
The Home Buyers' Plan allows first-time buyers to withdraw up to $60,000 from their RRSP, tax-free at the time of withdrawal, to use toward a qualifying home purchase. After the $8,000 FHSA transfer, the client has exactly $42,000 remaining in their RRSP — and they can withdraw every dollar of it under the HBP.
Important timing rule:HBP funds must have been in the RRSP for at least90 daysbefore the withdrawal. Money contributed specifically to top up an HBP draw — and then immediately pulled out — does not qualify. Plan ahead.
Putting it together — the full $50,000
F
FHSA withdrawal
$8,000
Tax-free. No repayment required. Ever.
H
Home Buyers' Plan (RRSP) withdrawal
$42,000
Tax-free at withdrawal. Must be repaid over 15 years.
✓
Total down payment — 100% from registered savings
$50,000
No additional cash required. Full down payment covered.
The updated HBP limit matters here.Prior to April 2024, the HBP maximum was $35,000 — which would have left this client $7,000 short. The increase to $60,000 means the entire $42,000 RRSP balance is accessible, and the $50,000 down payment is fully covered from registered savings alone.
What about repayment?
The FHSA piece is clean — nothing to repay, no conditions. The HBP withdrawal of $42,000 is a different story. It must be repaid to the RRSP over 15 years, with repayments beginning in the fifth year after the year of withdrawal. That works out to a minimum of $2,800 per year.
Program Amount withdrawn Repayment required Annual minimum
FHSA $8,000 None
Home Buyers' Plan $42,000 Over 15 years $2,800/yr
If a repayment is missed in a given year, that year's required amount is added to the client's taxable income for that year — so staying on schedule matters. On the flip side, clients can repay more than the minimum in strong income years, which reduces future obligations and rebuilds RRSP room faster.
Repayment grace period: For HBP withdrawals made after April 16, 2024, repayments begin in the fifth year after the year of withdrawal — a more generous timeline than the old two-year rule. Confirm the applicable rules with your advisor based on the year of your withdrawal.
The order of operations
1 Open the FHSA as early in the year as possible to unlock contribution room.
2 Transfer $8,000 from the RRSP to the FHSA — no tax impact, uses FHSA room.
3 Confirm the remaining RRSP funds have met the 90-day seasoning requirement.
4 Submit a Home Buyers' Plan withdrawal request (Form T1036) for up to $42,000.
5 At purchase, withdraw the FHSA balance tax-free using a qualifying withdrawal form.
6 Begin HBP repayments starting in year five after the year of withdrawal.
The bottom line
With the updated HBP limit of $60,000, a client who has $50,000 in their RRSP and has just opened their FHSA can now assemble their entire down payment from registered savings — $8,000 tax-free from the FHSA, and $42,000 from the HBP, with no cash shortfall and no immediate tax bill.
The math only works this cleanly because of the 2024 HBP limit increase. Under the old rules, there would have been a $7,000 gap. Today, there isn't.
If you're planning a purchase in the next 12 months and you haven't opened your FHSA yet, now is the time to act — every month you wait is room that doesn't accumulate. Reach out anytime to walk through what this looks like for your specific numbers.
MP
