buying

FHSA vs Home Buyers' Plan: Stacking Both in 2026

Published July 2, 2026 · By YYZ Mortgage

If you’re saving for a first home in the GTA, two registered accounts can do heavy lifting most savings accounts can’t: the First Home Savings Account (FHSA) and the RRSP Home Buyers’ Plan (HBP). Each has real tax advantages. But the detail many buyers miss is that you don’t have to choose — you can stack both, and in a market where the average GTA home ran about $1.07 million in May 2026 (TRREB), stacking is often the difference between a 5–10% down payment and a much stronger one.

Here’s how each program works in 2026, which to prioritize, and how to combine them.

The FHSA in 2026: the triple tax advantage

The FHSA, introduced in 2023, blends the best features of an RRSP and a TFSA:

• Contribute up to $8,000 per year, to a $40,000 lifetime maximum.
• Contributions are tax-deductible, like an RRSP — they reduce your taxable income in the year you claim them (and you can defer the deduction to a higher-income year).
• Growth is tax-free inside the account.
• Withdrawals for a qualifying first home are tax-free — and unlike the HBP, there is no repayment, ever.
• Unused room carries forward, up to $8,000 per year. Open an FHSA with $50 this year and you create room that accumulates even if you can’t max it yet.

To open one, you need to be a Canadian resident, at least 18 (age of majority), no older than 71, and a first-time buyer — broadly, you (and in some respects your spouse or common-law partner) haven’t lived in a home you owned in the current year or the previous four calendar years.

Deduction in, tax-free growth, tax-free out: no other account in Canada offers all three. If you qualify and haven’t opened one, that’s step one.

The HBP in 2026: your RRSP, borrowed by you

The Home Buyers’ Plan has been around since 1992, and it got a major upgrade in 2024: the withdrawal limit rose from $35,000 to $60,000 per person.

• Withdraw up to $60,000 from your RRSP tax-free to buy or build a qualifying first home. Couples who both qualify can withdraw up to $120,000 combined.
• You must repay it to your RRSP over a period of up to 15 years. Miss a year’s minimum repayment and that amount is added to your taxable income instead.
• Funds generally need to have sat in your RRSP for at least 90 days before withdrawal.
• One nuance from recent federal changes: buyers who withdrew during a temporary relief window in the early 2020s got extra years before repayments began. For new withdrawals, plan on the standard schedule — repayments starting the second year after withdrawal — and confirm the current timing with the CRA or your tax professional when you buy.

The HBP’s superpower is speed: if you already have RRSP savings, it unlocks money you’ve already accumulated. Its weakness is the repayment obligation — for a full $60,000 withdrawal, roughly $4,000 a year going back into your RRSP for 15 years, on top of your new mortgage payment.

FHSA vs HBP at a glance

Feature	FHSA	HBP
Maximum	$40,000 contributions (+ growth, also tax-free)	$60,000 withdrawal
Tax deduction	Yes, on contributions	Yes, on the original RRSP contributions
Repayment	None	Up to 15 years; shortfalls become taxable income
Best for	Buyers with 2+ years of runway	Buyers with existing RRSP savings
Per couple (both qualify)	$80,000 + growth	$120,000

The stacking math

One qualifying buyer can combine:

• $40,000 FHSA contributions, plus whatever tax-free growth accumulated on top,
• plus up to $60,000 via the HBP,

for $100,000+ per person. A couple where both partners qualify could access $200,000 or more. That’s not a rounding error in the GTA — it can be the majority of a down payment.

Illustrative example: Priya and Dan want to buy a $750,000 condo townhouse in Scarborough in 2028. The minimum down payment on that price is $50,000 (5% of the first $500,000 plus 10% of the remaining $250,000). Each opened an FHSA in 2024 and contributes $8,000 a year, so by early 2028 they’ll have roughly $64,000–$70,000 combined in FHSAs including modest growth. Dan also has $30,000 in an RRSP from earlier working years. Using FHSA money first (no repayment) and topping up with a partial HBP withdrawal, they can put down well over 10% — shrinking both their mortgage and their default insurance premium — while their FHSA deductions generated tax refunds along the way that they recycled into contributions. Figures are illustrative; growth isn’t guaranteed and everyone’s tax picture differs.

Not sure how the pieces fit your situation? Talk to a broker — we help first-time buyers sequence FHSA, HBP, and pre-approval timing all the time, at no cost to you.

Which comes first? A simple decision order

1. Open the FHSA now, even if the purchase is years away. Room only starts accumulating once the account exists, and carry-forward is capped at $8,000 — you can’t open an account in 2029 and claim five years of missed room.

2. Prioritize FHSA contributions over new RRSP contributions if home purchase is the goal. Same deduction going in, but the FHSA money comes out tax-free with no repayment schedule shadowing your first years of homeownership.

3. Use the HBP for RRSP money you already have. It converts past savings into down payment without new saving effort. Just budget honestly for the repayments — a mortgage payment plus an HBP repayment plus property tax is the real monthly cost of ownership.

4. Buying within a year or two with little saved in either? Contribute what you can to the FHSA for the deduction and carry-forward, and talk to a broker early — down payment strategy, gifted funds, and pre-approval interact in ways that are easier to plan than to fix.

Don’t forget the rest of the first-timer toolkit

The FHSA and HBP handle the down payment, but 2026’s other first-time-buyer measures matter too:

• Land transfer tax rebates: up to $4,000 from Ontario, plus up to $4,475 more if you’re buying in the City of Toronto.
• 30-year insured amortizations for first-time buyers (and new-build purchases), which lower monthly payments on insured mortgages.
• The $1.5 million insured mortgage cap, which lets you buy above $1 million with less than 20% down.
• The stress test: you qualify at your contract rate plus 2% (or the 5.25% floor, if higher). With strong 5-year fixed rates around 3.94% as of July 2026 (OAC, subject to change), most buyers today are tested near 5.94%.

We cover all of these — with current GTA prices and worked examples — in the First-Time Home Buyer GTA 2026 Playbook, and you can estimate payments at different down payment levels with our mortgage payment calculator.

Common mistakes to avoid

• Waiting to open the FHSA. The account must exist for room to accrue. Open it with a nominal deposit today.
• Forgetting the 90-day RRSP rule. Money contributed to an RRSP less than 90 days before an HBP withdrawal can lose its deduction. Sequence contributions well ahead of your purchase.
• Investing short-horizon money aggressively. If you’re buying within 1–2 years, a market dip right before closing can shrink your down payment. Many buyers shift FHSA/RRSP funds toward cashable GICs or high-interest savings as the purchase approaches.
• Ignoring HBP repayments after closing. Missed repayments quietly become taxable income. Set up an automatic monthly transfer and forget about it.
• Treating the programs as the whole plan. Down payment is one pillar; qualification (income, debts, credit, stress test) is the other. Get pre-approved before you fall in love with a listing.

The bottom line

The FHSA is the best first-home savings vehicle Canada has ever offered — deductible in, tax-free out, nothing to repay. The HBP, at its new $60,000 limit, is the fastest way to turn existing RRSP savings into keys. Used together, they can put six figures per couple toward a GTA down payment.

When you’re ready to turn savings into an approval, check current rates or reach out — we’re an FSRA-licensed brokerage and our advice costs first-time buyers nothing.

---

This article is general information, not financial, legal or tax advice. Mortgage products are subject to lender approval (OAC). Rates and product details change — confirm current terms before deciding. Speak with a licensed mortgage professional about your situation.

Frequently asked questions

Can I use both the FHSA and the Home Buyers' Plan for the same home?

Yes. The programs stack, so one buyer can combine up to $40,000 of FHSA contributions (plus any growth, which also comes out tax-free) with up to $60,000 withdrawn from an RRSP under the HBP. A couple where both partners qualify can potentially access $200,000 or more between the two programs.

What is the difference between FHSA and HBP repayment rules?

FHSA withdrawals for a qualifying first home are tax-free and never repaid. HBP withdrawals must be repaid to your RRSP over up to 15 years, and any year you repay less than the required amount, the shortfall is added to your taxable income. That repayment obligation is the biggest practical difference between the two programs.

How much can I withdraw under the Home Buyers' Plan in 2026?

Up to $60,000 per person from your RRSP, a limit that was raised from $35,000 in April 2024. Both partners in a couple can each withdraw up to $60,000 if both qualify as first-time buyers, for a combined $120,000. Funds generally must have been in the RRSP at least 90 days before withdrawal.

Which should I open or use first: FHSA or HBP?

For most buyers with a few years of runway, the FHSA comes first because contributions are tax-deductible going in and withdrawals are tax-free with no repayment. The HBP works best as a supplement if you already have meaningful RRSP savings. Opening an FHSA early matters even with small deposits, because up to $8,000 of unused room carries forward each year.

What happens to my FHSA if I never buy a home?

You can transfer the balance to your RRSP or RRIF tax-free without using up RRSP contribution room, so the tax deductions you claimed are never clawed back. The account can stay open until 15 years after opening or age 71, whichever comes first. Withdrawing the money in cash instead is taxable.

Do FHSA and HBP funds count as a normal down payment for mortgage qualification?

Yes. Lenders treat properly documented FHSA and HBP withdrawals as your own funds, which is the strongest form of down payment. You will need to show the account statements and withdrawal paperwork, and your mortgage approval still depends on income, credit, and the stress test.

This content is general information, not financial, legal or tax advice. Mortgage products are subject to lender approval (OAC). Speak with a licensed mortgage professional about your situation.