Home Buyers’ Plan (HBP)
What it is:
Allows you to withdraw up to $35,000 (now $60,000 for couples) from your RRSP tax‑free to use as a down payment. You repay it over 15 years at 1/15 per year.
✅ Pros:
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No taxes if repayments are on time.
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Can cover a large chunk of your down payment.
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Funds can be used flexibly for eligible home purchases.
⚠️ Cons:
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Must repay, missed annual instalments count as income.
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Drains retirement savings, which may grow better long-term.
FHSA (First Home Savings Account)
What it is:
A new tax-advantaged account (can contribute up to $8,000/year, max $40,000) that offers RRSP-style deductions and TFSA-style tax-free growth and withdrawals for your first home.
✅ Pros:
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Deductible contributions, plus any gains aren’t taxed on withdrawal.
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No repayment obligation.
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You can combine FHSA and HBP for larger down payment options.
⚠️ Cons:
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One-time use only; once used, the account closes.
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Need discipline to fully fund it; unused room doesn’t convert after closing.
First‑Time Home Buyer Incentive (FTHBI) – Now Discontinued
What it was:
An interest-free shared equity loan (5% resale homes, 10% new builds). CMHC withdrew the program, closing it after March 31, 2024.
Why it ended:
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Low participation due to strict income/property limits.
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Buyers didn’t like sharing home equity.
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Admin costs were high relative to impact.
So—Are These Programs Worth It?
HBP:
✅ Great for large down payments, but borrows from your retirement and must be paid back.
FHSA:
✅ Best all-around tool—double tax benefit, no repayments, flexible savings.
⚠️ Only usable once, so timing matters.
FTHBI:
No longer available. If you still have one through old approval, consider long-term repayment plans carefully due to equity sharing.
Quick comparison:
| Program | Max Value | Tax Benefit | Repayment Required? | Best For |
|---|---|---|---|---|
| FHSA | $40,000 + growth | Deductible + tax-free growth | ❌ No repayment | Tax-savvy savers aiming for max return |
| HBP | $35k–$60k | No tax at withdrawal | ✅ Yes – 15-year payback | Those with RRSP savings ready now |
| FTHBI | 5–10% equity | N/A (was interest-free) | ✅ Shared equity repayable | Not available for new buyers |
💡 Final Word
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FHSA is the most powerful for long-term savers—no taxes, no payback, maximum flexibility.
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HBP is worth considering if you already have RRSP savings and don’t mind a structured repayment.
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FTHBI is no longer available for new applicants.
Combine FHSA + HBP? Absolutely—use HBP first, then top up with FHSA.
That combo gives you potentially $100,000+ towards your home, with tax perks and less impact on long-term growth.
✔️ Is it worth it?
If you're preparing for a first‑time purchase:
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Open and max your FHSA, instant tax break and savings boost.
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Use HBP if your RRSP holds funds you’re willing to repay.
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Skip FTHBI, it's no longer available.
Together, these programs can significantly shrink your mortgage size and help make owning your first home more affordable.
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