Quick comparison: FHSA vs HBP
The FHSA is a dedicated first-home savings account with a double tax advantage and no repayment. The HBP is a temporary tax-free loan from your existing RRSP that you must repay. FHSA room only starts once you open the account; HBP requires RRSP savings already in place. They solve different problems and work best together.
When FHSA wins
Choose FHSA first if you are still saving, want an immediate tax deduction, and do not want a 15-year repayment obligation. Opening early also starts your annual contribution room and the 15-year account clock. Unused FHSA balances can later transfer to an RRSP tax-free if you never buy.
When HBP wins
Use HBP when you already have substantial RRSP savings and need more than $40,000 for a down payment. HBP does not create new contribution room — it unlocks money you already saved for retirement. It is especially useful for buyers close to purchasing who cannot wait to fill an FHSA over multiple years.
The winning move: use both
CRA allows FHSA and HBP on the same purchase. A practical order: open and fund the FHSA every year, keep contributing to RRSP if your plan allows, then withdraw FHSA tax-free and HBP as needed at purchase. Model both paths in our comparison tools before you move money.
Frequently asked questions
- Is FHSA better than the Home Buyers' Plan?
- For most new savers, yes — FHSA offers tax-deductible contributions and tax-free qualifying withdrawals with no repayment. HBP is better as a supplement when you already have RRSP savings and need more than the $40,000 FHSA lifetime limit.
- Can I use FHSA and HBP in the same year?
- Yes. You can make a qualifying FHSA withdrawal and an HBP withdrawal for the same home purchase, subject to each program's rules and limits.
- Should I transfer RRSP money into an FHSA?
- You can transfer from an RRSP to an FHSA subject to FHSA contribution limits, but transfers do not create a new tax deduction. Get tax advice before moving funds — especially if you also plan an HBP withdrawal.
- What if I only have enough for one account?
- Open and fund the FHSA first to start contribution room and capture the double tax advantage. Add HBP later once you have RRSP savings or need more than $40,000 for the down payment.