Comparison

FHSA vs Home Buyers' Plan: Which Is Better for Your First Home?

Two different ways to save for a down payment with tax advantages. Here's how to choose, or use both.

By Ahmad Jamal · Published November 22, 2025 · 6 min read

Canada gives first-time buyers two different ways to save for a down payment with tax perks: the FHSA and the Home Buyers' Plan. They look similar on the surface, but one comes with a repayment schedule and one doesn't. Here's how they actually compare, and why using both might beat picking just one.

Quick Answer

The FHSA is the better default for most first-time buyers because withdrawals never need to be repaid. The Home Buyers' Plan lets you pull more from your RRSP ($60,000 vs $40,000), but that money has to be repaid over 15 years or the missed portion gets taxed as income. If you can manage it, using both gets you the most down payment help: FHSA first, HBP on top.

Quick Comparison

Here's the side-by-side, then we'll get into why the difference actually matters.

FeatureFHSAHBP (RRSP)
Maximum Amount$40,000$60,000
Tax Deduction
Tax-Free Withdrawal
Repayment RequiredNoYes (15 years)
Annual Limit$8,00018% of income
Years to Max5 yearsVaries

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The Big Difference: Repayment

This is the part that matters most. FHSA withdrawals are yours, full stop, no repayment ever. HBP withdrawals have to go back into your RRSP over 15 years, or the unpaid portion gets added to your income at tax time.

Repayment at a Glance

FHSA: $40,000 withdrawn$0 repayment
HBP: $60,000 withdrawn$4,000/year for 15 years

FHSA withdrawals come with no strings attached.

Miss an HBP repayment?

That year's required amount gets added to your taxable income instead, on top of whatever else you earned that year.

When to Use FHSA

  • You're 1 to 15 years away from buying
  • You don't want repayment obligations after you buy
  • You're starting fresh with limited RRSP savings
  • You want the double tax benefit: a deduction going in, tax-free coming out

When to Use HBP

  • You already have substantial RRSP savings
  • You need more than the FHSA's $40,000 limit
  • You're comfortable committing to the 15-year repayment
  • You're buying soon and haven't built up FHSA room yet

Best Strategy: Use Both

Here's the maximum down payment help available if you combine both accounts:

Maximum Down Payment Assistance

FHSA (no repayment)$40,000
HBP (15-year repayment)$60,000
Individual total$100,000

Couple total: $200,000 combined, using two FHSAs and two HBPs between you.

If you're doing this as a couple, that combined total assumes you each open and max out your own FHSA and use your own HBP room. Start with FHSA contributions since that money is yours free and clear, then lean on HBP if you need more before closing day.

The Bottom Line

FHSA is the better default for most first-time buyers. No repayment means no obligation waiting for you after you've already stretched your budget for a mortgage. HBP still earns its place if you've got RRSP savings built up or need more than the FHSA's $40,000 ceiling. If you can manage it, using both gets you the most down payment help of any strategy available to Canadian buyers.

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Disclaimer

This article is for informational and educational purposes only and does not constitute financial, tax, investment, or legal advice. Contribution limits, tax rates, benefit amounts, and government program rules are approximate and change over time. Always verify current figures directly with the Canada Revenue Agency (CRA) and consult a qualified financial advisor, accountant, or tax professional before making decisions about your money. Waypoint Budget does not provide professional financial advice, and using our content does not create an advisory relationship.

Project Your FHSA Growth

See how much your FHSA could be worth by your home-purchase date based on your contributions and rate of return.