FHSA vs. Home Buyers' Plan: Can You Use Both?

Yes — the First Home Savings Account and the Home Buyers' Plan can be stacked on the same home, and for most Ontario first-time buyers the smart move is to use the FHSA first and keep the HBP as the second barrel.

By the HomesFound team · October 30, 2026 · 5 min read

The two programs in one breath each

The FHSA is a savings account for first-time buyers: contribute up to $8,000 per year to a lifetime maximum of $40,000, deduct the contributions from your taxes, and withdraw the money tax-free when you buy a qualifying home. The Home Buyers' Plan (HBP) is a withdrawal program for money you already have: take up to $60,000 out of your RRSP, tax-free, to buy or build a qualifying home, then repay it to your RRSP over 15 years. One is where new savings should go; the other is how existing retirement savings can be borrowed from yourself. They're complements, not rivals — and Ottawa explicitly lets you use both on the same purchase.

Where the FHSA wins

• The tax treatment is better. An FHSA gives you a deduction on the way in and a tax-free withdrawal on the way out — the only account in Canada that offers both. HBP withdrawals are merely tax-deferred: the money must go back into your RRSP or it's taxed.
• No repayment. FHSA money is yours once withdrawn for a qualifying home. HBP money is a loan from your future self with a 15-year schedule attached.
• Per-person doubling is clean. Each spouse or partner has their own FHSA, so a couple can shelter up to $80,000 of contributions between two accounts.

Where the HBP wins

• The limit is higher. $60,000 per person versus the FHSA's $40,000 lifetime cap — a couple can draw up to $120,000 under the HBP.
• It works on money you already have. If your down payment already sits in an RRSP because you've been saving for years, the HBP is the only tax-free way to pull it out for a home. You can't retroactively move RRSP savings into an FHSA beyond your available FHSA room.
• No account-opening trap. The HBP doesn't require years of advance planning — just money in an RRSP for at least 90 days before you withdraw it.

The deadline that punishes late starters

The FHSA's one real catch is its clock. Your $8,000 of annual room only starts accumulating in the year you open the account, and unused room carries forward — but only within the account's life. Open one at 25 and buy at 33, and you'll have accrued the full $40,000 of room. Open one in the year you buy, and you have exactly $8,000 of room no matter how much cash you have. The account must also be closed by the end of the year following your first qualifying withdrawal, or 15 years after opening (or by age 71), whichever comes first. Whatever FHSA money and room remains unused can be transferred into your RRSP on a tax-free basis without consuming RRSP room — which converts a missed home purchase into extra retirement savings rather than a penalty. The practical advice is almost insultingly simple: if a first home is anywhere in your future, open the account now, even with a token deposit, and let the room accumulate.

The HBP repayment, honestly explained

Repayment starts the second year after the year of withdrawal: withdraw in 2026 and your first repayment year is 2028, with one-fifteenth of the balance due each year for 15 years. You repay by contributing to your RRSP and designating the contribution as an HBP repayment on your tax return. If you repay less than the year's scheduled amount, the shortfall is added to your taxable income that year — the plan doesn't collapse, you just lose the tax shelter on the amount you skipped. Repaying more than required in a year reduces later years' minimums. And note the order of consequences: the 90-day rule means money deposited into an RRSP and withdrawn too quickly under the HBP may lose its tax deduction, so last-minute RRSP top-ups before a purchase need care.

Using both on one home: the sequence

1. Open the FHSA early — ideally years before you buy — and contribute as room and cash flow allow. Claim the deduction in a year when your income makes it valuable; deductions can be carried forward.
2. Keep RRSP savings for the HBP portion, ensuring the funds you'll withdraw have been in the RRSP at least 90 days.
3. At purchase, withdraw the FHSA first using the prescribed form, within the qualifying-home rules — you need a written agreement to buy or build, and must occupy the home as your principal residence within a year.
4. Withdraw under the HBP for the balance of the down payment. Both withdrawals can fund the same purchase.
5. After closing, close the FHSA on schedule (transferring any leftover to your RRSP) and set a reminder for the HBP's first repayment year.

A couple who maxes both programs walks into a purchase with up to $200,000 of down payment drawn out tax-free between them — $80,000 of FHSA and $120,000 of HBP. Few buyers max both. But even partial use beats leaving either on the table, because the FHSA's room clock and the HBP's 90-day rule both punish improvisation. The programs reward the same thing the housing market does: starting earlier than feels necessary.

Next step

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