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

Canada gives first-time homebuyers two great options: the FHSA (First Home Savings Account) and the HBP (Home Buyers' Plan). Both help you save for a down payment with tax advantages. But they work differently - and the best choice depends on your situation.

Quick Comparison

Feature	FHSA	HBP (RRSP)
Maximum Amount	$40,000	$60,000
Tax Deduction
Tax-Free Withdrawal
Repayment Required	No	Yes (15 years)
Annual Limit	$8,000	18% of income
Years to Max	5 years	Varies

The Big Difference: Repayment

This is the key distinction. FHSA withdrawals are truly free - no repayment ever. HBP withdrawals must be repaid to your RRSP over 15 years, or the unpaid portion becomes taxable income.

FHSA: $40,000 Withdrawn

Repayment required: $0

Money is yours, no strings attached.

HBP: $60,000 Withdrawn

Repayment required: $4,000/year for 15 years

Miss a payment? That year's portion becomes taxable income.

When to Use FHSA

You're 1-15 years away from buying
You don't want repayment obligations after buying
You're starting fresh (limited RRSP savings)
You want the double tax benefit

When to Use HBP

You already have substantial RRSP savings
You need more than $40,000
You're comfortable with the 15-year repayment
You're buying soon and haven't built FHSA room

Best Strategy: Use Both

The maximum down payment assistance you can get:

FHSA: $40,000 (no repayment)
HBP: $60,000 (15-year repayment)
Individual Total: $100,000
Couple Total: $200,000

For a couple, that's potentially $200,000 for your down payment. Use FHSA first (free money), then HBP if you need more.

The Bottom Line

FHSA is the clear winner for most people - no repayment makes it superior. But HBP is valuable if you already have RRSP savings or need more than $40,000. Ideally, use both.

Track Your Home Savings

Waypoint Budget helps you track FHSA and down payment progress all in one place.