Buying your first home in Old Oakville or elsewhere in the GTA can feel overwhelming, especially when you are deciding how to use the FHSA and the RRSP Home Buyers’ Plan. You want a clear, simple answer on which one helps most and how to time everything for your purchase. In this guide, you will learn how each program works, how to stack them, what timelines and documents to plan for, and how far they may take you at local price points. Let’s dive in.
What the FHSA does
The First Home Savings Account is a registered plan designed to help you save for your first home. Your contributions are generally tax deductible, and qualifying withdrawals for a first home are typically tax free. The plan has annual contribution room and a lifetime limit.
- For current limits, eligibility and transfer rules, see the CRA’s page on the First Home Savings Account.
- Qualifying withdrawals are tax free if you meet the conditions on the CRA page.
- If you do not buy a home in time, there are specific options to transfer or close the plan, with tax results explained by the CRA.
Read the CRA overview for exact rules and current numbers: First Home Savings Account.
What the RRSP HBP does
The Home Buyers’ Plan lets you withdraw from your RRSP to buy or build a qualifying home for yourself on a tax-free basis at the time of withdrawal, if you meet CRA’s conditions. You must repay what you withdraw over a set number of years.
- There is a per-person withdrawal maximum. Check the CRA page for the current cap and eligibility.
- RRSP funds generally must be in the RRSP for a minimum period before you can withdraw under HBP.
- Repayment is required each year over the repayment period. If you do not make the minimum repayment in a given year, that portion is added to your income for tax purposes.
Get the official details here: Home Buyers’ Plan (HBP).
FHSA vs HBP: key differences
Here is how the two programs compare at a glance:
Tax at contribution
- FHSA: Contributions usually generate a tax deduction in the year you contribute.
- RRSP/HBP: RRSP contributions are deductible. Later HBP withdrawals are tax free at withdrawal if you qualify, but you must repay them.
Tax at withdrawal
- FHSA: Qualifying first-home withdrawals are tax free.
- HBP: Withdrawals are tax free when used for a qualifying purchase, but missed repayments become taxable income in the year missed.
Limits
- FHSA: Has both annual and lifetime limits, with carry-forward rules explained by the CRA.
- HBP: Has a per-person withdrawal cap set by the CRA.
Repayment and long-term impact
- FHSA: No repayment on qualifying withdrawals. If not used for a home, specific transfer or closure rules apply.
- HBP: Repayment is required, which can affect your retirement savings if you do not rebuild your RRSP as planned.
Can you use both together?
Yes. You can typically combine FHSA savings with an RRSP withdrawal under the HBP. If you are buying with a spouse or partner who also qualifies, each of you can use your own FHSA and your own HBP entitlement.
- Stacking can increase your available down payment.
- Each program has its own rules, limits and timing. Make sure the funds are in the right accounts and eligible by the time you need them.
How far can these programs go in Oakville?
Local prices vary by property type and neighborhood. The examples below use simple, illustrative numbers to show how FHSA and HBP can help at common GTA price points. For minimum down payment rules, see CMHC guidance on minimum down payments.
Example A: GTA condo, single buyer
- Price: $600,000. Minimum down payment: 5% = $30,000.
- Illustrative program totals: FHSA lifetime max $40,000 and HBP $35,000 per person. A single buyer could access up to $75,000 in this example.
- Result: You could cover the minimum down payment and still have funds for closing costs or a larger down payment, subject to your actual contribution room and eligibility.
Example B: Townhouse or semi, single buyer
- Price: $1,100,000. Minimum down payment: 20% on $1,000,000+ = $220,000.
- A single buyer with $75,000 from FHSA + HBP would cover about 34% of the required down payment.
- Result: Helpful, but you would still need additional savings, a gift, or other verified sources.
Example C: Oakville detached, two buyers
- Price: $1,800,000. Minimum down payment: 20% = $360,000.
- Two qualifying buyers using both programs could have a combined $150,000 in this illustration.
- Result: You could cover about 42% of the down payment, with a substantial remainder still required.
Important note: The figures above are examples. Always check the CRA pages for current FHSA and HBP limits, and confirm your down payment requirements using CMHC rules and your lender’s guidelines.
Timing and documentation
Getting the timing right reduces stress and protects your deal.
- FHSA setup and withdrawals: Confirm how long you need to hold the account before a qualifying withdrawal and what documents the provider will require.
- HBP look-back: RRSP funds usually must be in the plan for a minimum period before they qualify for HBP. Confirm this on the CRA page before attempting last-minute RRSP strategies.
- Lender and insurer verification: Lenders and mortgage insurers typically accept FHSA and HBP funds, but they will verify the source of the down payment and may require statements and forms. Start this conversation early with your lender or broker.
HBP repayment example
Here is a simple illustration of the repayment schedule:
- If you withdraw $35,000 using HBP, your minimum annual repayment over 15 years would be about $2,333. If you skip a year, that year’s required amount is included in your taxable income.
This is a basic example. Use the CRA HBP page for your exact repayment start date, annual minimum and how to designate repayments on your return.
Which option should you prioritize?
It depends on your cash flow, tax situation and timeline to buy. As a general idea:
- If you want tax-deductible saving without future repayments for a qualifying withdrawal, the FHSA can be attractive.
- If you already have RRSP savings and meet the holding-period rule, HBP can unlock funds quickly, with a plan to repay over time.
- Many first-time buyers use both. The key is to map your contributions, target purchase date and closing timeline to each program’s rules.
This article provides general information. For exact limits, carry-forward rules, transfer options, look-back periods and the numbers that apply to you, consult the CRA pages linked above and speak with a tax professional or financial advisor before making RRSP or FHSA decisions.
Your next step in Old Oakville
If you are aiming for a condo, townhouse or detached home in Old Oakville or the wider GTA, align your FHSA and HBP plan with real market options, down payment rules and lender expectations. A clear plan can save you time and money when the right property hits the market.
Ready to map your path to a first home in Oakville? Get local guidance, pricing context and a step-by-step plan with Nancy Hate.
FAQs
What is the FHSA and how does it help first-time buyers?
- The First Home Savings Account is a registered plan where contributions are generally tax deductible and qualifying withdrawals for a first home are tax free; see the CRA FHSA page for current limits and rules.
What is the RRSP Home Buyers’ Plan and who qualifies?
- The HBP lets eligible first-time buyers withdraw from their RRSP tax free at withdrawal time to buy or build a qualifying home, with required repayments later; check the CRA HBP page for eligibility and the current withdrawal cap.
Can I use both FHSA and HBP for the same home purchase?
- Yes, you can often combine FHSA savings with an HBP withdrawal, and spouses or partners who both qualify can each use their own accounts and limits.
How much down payment do I need for homes over $1 million?
- For properties at $1,000,000 or more, the typical minimum down payment is 20 percent; review the rules on the CMHC minimum down payment page and confirm with your lender.
When do HBP repayments start and what if I miss one?
- HBP amounts are repaid over a set number of years with a minimum annual repayment; if you miss the minimum in a year, that amount is added to your taxable income for that year as per CRA rules.
Will lenders accept FHSA or HBP funds as my down payment?
- Lenders and mortgage insurers usually accept these sources, but they verify timing and documentation; speak with your lender or broker early to align statements, forms and closing dates.
