Home Buyers’ Plan (HBP)

CRA currently states that an eligible participant can withdraw up to $60,000 from RRSPs under the HBP. A couple can potentially access up to $120,000 if each person independently qualifies and has sufficient eligible RRSP funds.

The HBP does not create new money; it changes the use of retirement savings. The mortgage benefit is a larger available down payment. The long-term trade-off is that withdrawn RRSP capital is no longer invested in the plan unless and until it is repaid.

The HBP has its own first-time-buyer and qualifying-home conditions. There are also special rules for certain persons with disabilities and for people who have participated in the HBP before.

Do not assume that qualifying for FHSA, insured first-time-buyer amortization or an Ontario land-transfer-tax refund automatically proves HBP eligibility. Apply the current HBP definition separately.

HBP rules include conditions around RRSP contributions and withdrawals, including the familiar 90-day timing issue for deductibility of certain RRSP contributions made shortly before an HBP withdrawal. A buyer who plans to contribute and withdraw in the same purchase cycle should verify the tax rules before moving the money.

This is tax-program timing, not a mortgage-lender seasoning rule. Keep those concepts separate.

CRA’s HBP repayment system generally requires repayment over a 15-year period. If the required annual repayment is not made, the shortfall can be included in taxable income for that year.

That means the HBP should be included in post-closing planning even though it is not a conventional monthly loan on the credit bureau. A household that uses $120,000 of combined HBP withdrawals should understand the future annual savings commitment.

CRA currently extends the temporary repayment relief to participants whose first HBP withdrawal is made from January 1, 2022 through December 31, 2028. For a first withdrawal in that window, the 15-year repayment period starts in the fifth year following the year of the first withdrawal rather than the ordinary earlier start date.

For example, CRA currently says a first withdrawal made in 2026 has its first repayment year in 2031. Because this is a temporary rule, borrowers should still verify the CRA schedule for the year in which they actually withdraw.

Yes, provided the buyer meets the conditions for both programs. A well-funded first-time buyer can therefore combine FHSA, HBP and ordinary savings rather than choosing only one account.

Use FHSA and Home Purchase for the comparison. The key distinction is that a qualifying FHSA withdrawal has no HBP-style repayment schedule.

The lender may need proof of the RRSP/FHSA balance and evidence of the withdrawal into an account available for closing. Preserve the withdrawal record and receiving statement rather than relying on a screenshot of today’s balance.

If the withdrawal is still pending when financing conditions are being cleared, communicate the expected timing. The commitment can require proof that the down payment will be available by closing.

An HBP withdrawal can materially reduce the mortgage or make the purchase possible. But the withdrawn funds are no longer compounding inside the RRSP until repaid, and future repayments do not create a new tax deduction in the same way as ordinary deductible RRSP contributions.

A larger down payment therefore has to be weighed against retirement assets and liquidity. The strongest decision compares mortgage savings, insurance savings, expected investment horizon and post-closing cash needs—not just the size of the tax-free withdrawal.

Start with the minimum cash needed to close. Then compare how much additional HBP withdrawal would change mortgage insurance, payment and qualification. Finally, test whether the buyer is comfortable with the future RRSP repayment obligation and reduced retirement balance.

Use the Down Payment Planner. A buyer does not need to withdraw the maximum simply because the maximum is available.

RRSP contributions made shortly before an HBP withdrawal can have restricted deductibility under the HBP formula. This is why buyers often hear that contributed funds should remain in the RRSP for at least 90 days before the withdrawal.

Do not confuse that tax rule with a lender’s 90-day source-of-funds history request. They can happen in the same file but answer different questions.

A previous HBP does not automatically make someone permanently ineligible, but current eligibility depends on the HBP’s first-time-buyer rules and the status of prior HBP balances. CRA provides specific conditions for re-participation.

Check the current CRA account/HBP information before building a purchase plan around another $60,000 withdrawal.

HBP repayments are tax-plan repayments rather than a normal consumer loan payment reported like a car loan. A mortgage lender’s debt-service treatment can therefore differ from an ordinary liability.

For household planning, however, the future annual repayment is real. A purchase budget that ignores it can overstate disposable income in the years after closing.

FHSA qualifying withdrawals generally do not need to be repaid, while HBP withdrawals generally do. That can make FHSA funds especially attractive for purchase cash, but individual tax position, account balances, investment gains and liquidity can change the answer.

Model the purchase in layers: use available non-repayable purchase funds first, then test how much HBP actually changes down payment, insurance or monthly payment. There is no requirement to withdraw the HBP maximum.