FHSA or HBP: Which Should You Use First?
If you're saving for your first home, you've probably heard of the FHSA and the HBP. Both can help you build your down payment, but they don't work the same way.
Last updated: July 2026 · Sources: CRA — FHSA, CRA — HBP
Short answer: in most cases, it's worth prioritizing the FHSA first. Why? Because a qualifying FHSA withdrawal is not taxable and never has to be repaid. The HBP can be very useful as a complement, especially if you already have money in your RRSP, but it comes with a repayment obligation.
The FHSA in brief
The First Home Savings Account lets you contribute up to $8,000 per year, up to a lifetime maximum of $40,000.
Its main advantage is that it combines features of the RRSP and the TFSA. Like an RRSP, your contributions can be tax-deductible. Like a TFSA, qualifying withdrawals — including any investment growth — can be made tax-free.
Another key advantage: you don't have to repay a qualifying FHSA withdrawal.
The HBP in brief
The Home Buyers' Plan lets you withdraw up to $60,000 from your RRSP to buy or build a qualifying home.
The big difference from the FHSA is that the HBP must be repaid. Generally, withdrawn amounts must be repaid to an RRSP over a maximum of 15 years. If you don't make the required minimum repayment in a given year, the unpaid portion is added to your taxable income.
Quick comparison
| Criteria | FHSA | HBP |
|---|---|---|
| Limit | $40,000 lifetime contributions | $60,000 per person |
| Repayment | None for a qualifying withdrawal | Yes, generally over 15 years |
| Annual contribution | $8,000 per year | Based on your available RRSP room |
| Waiting period before withdrawal | No minimum holding period for a qualifying withdrawal | Funds generally need to meet certain RRSP-related rules |
| Best used for | Saving early for a first home | Topping up your down payment if you already have an RRSP |
Educational content based on public sources (Canada.ca, CRA). Not a substitute for professional advice — confirm your situation before withdrawing funds. HypothequeGo.ca is a general information site, not affiliated with a mortgage brokerage.
Can you use both at the same time?
Yes. The FHSA and the HBP are not mutually exclusive. You can use both for the same qualifying home, as long as you meet the rules specific to each program.
Combined, they can add up to $100,000 per person before any FHSA investment growth: $40,000 in FHSA contributions and $60,000 through the HBP. For a couple, that can reach $200,000 if each person is eligible and has the necessary funds in their own accounts.
So, which one should you use first?
In most cases, the FHSA should be prioritized first.
The reason is simple: a qualifying FHSA withdrawal never has to be repaid. It's often the most efficient tool for building a down payment without creating a future obligation. The HBP becomes appealing as a complement, especially if you've already built up savings in your RRSP, or if your purchase is coming up and your FHSA hasn't had time to fill up.
Simple example
Say you have $25,000 in your FHSA and $30,000 in your RRSP.
You could first use your FHSA to take advantage of a qualifying withdrawal with no repayment. Then, if you need a bigger down payment, you could top it up with the HBP. This approach often lets you keep the HBP as a supporting tool rather than your main source of down payment funds.
When is the FHSA more advantageous?
The FHSA is often more advantageous if:
- check_circleyou're not buying right away;
- check_circleyou want to lower your taxable income with your contributions;
- check_circleyou want to avoid a repayment obligation;
- check_circleyou want your investments to grow tax-sheltered;
- check_circleyou're starting your home-buying preparation early.
When can the HBP be useful?
The HBP can be useful if:
- check_circleyou already have money in your RRSP;
- check_circleyour purchase is coming up soon;
- check_circleyou want to increase your down payment;
- check_circleyou're comfortable managing future repayments;
- check_circleyou want to combine several savings sources.
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Frequently asked questions
Sources: CRA — FHSA · CRA — HBP
Does the FHSA have a deadline for use? expand_more
Yes. An FHSA can't stay open indefinitely. It generally must be closed by the earliest of the applicable deadlines, such as the end of the maximum participation period or the year you turn 71. After a first qualifying withdrawal, the account should also be closed by December 31 of the following year.
What happens if I don't end up buying a home? expand_more
If you don't end up buying a home, you can generally transfer the funds from your FHSA to your RRSP or RRIF, subject to the applicable rules. You can also withdraw the funds, but a non-qualifying withdrawal is generally taxable.
Is there repayment relief for the HBP in 2026? expand_more
HBP rules have changed in recent years. The CRA notes temporary relief for certain first withdrawals made between 2022 and 2025, and the federal government proposed in 2026 to extend that relief to first withdrawals made through the end of 2028. Since rules can change, it's important to check the official rules at the time of your withdrawal.
Conclusion
For most first-time buyers, the FHSA is often the best starting point. It lets you save with tax advantages and withdraw the money for a qualifying first home without having to repay it.
The HBP remains a powerful tool, but it generally makes more sense to use it as a complement, especially if you already have savings in your RRSP. Before withdrawing any funds, take the time to check the official rules and confirm your situation with a professional.