FHSA better for most first-time buyers — no repayment, combine both for $100K+ per person
Total Tax-Free Down Payment Available:
| Feature | FHSA | RRSP HBP |
|---|---|---|
| Maximum per person | $40,000 | $60,000 |
| Tax deduction on contribution | Yes | Yes |
| Withdrawal tax-free? | Yes — permanently | Yes — but must repay |
| Repayment required? | No | Yes — 1/15th/year over 15 years |
| Penalty for non-repayment | N/A | Added to taxable income |
| RRSP room consumed? | No | No (withdraws from RRSP, repays to RRSP) |
| 90-day holding rule? | No | Yes — must be in RRSP 90+ days |
| Can be combined with the other? | Yes | Yes |
| Can transfer to RRSP if unused? | Yes — without using RRSP room | N/A |
| Must close account if no home? | By age 71 or year 15 after opening | No — RRSP continues |
The FHSA is almost universally superior to the HBP for new homebuyers because:
The HBP ($60,000 limit) has a higher cap than the FHSA ($40,000 lifetime). For buyers who have already accumulated significant RRSP savings and want maximum down payment, the HBP provides access to $60,000 vs. the FHSA's $40,000. The best strategy is to use both simultaneously.
| Strategy | Amount at Purchase | Tax Refund Earned | Repayment Required | Net Advantage |
|---|---|---|---|---|
| FHSA only (5 years × $8K) | $40,000 | ~$16,000 (at 40%) | $0 | $40,000 tax-free + $16K refund |
| HBP only (existing RRSP) | $60,000 | Already earned | $4,000/yr × 15 yrs | $60,000 but must repay |
| FHSA + HBP combined | $100,000 | $16,000+ refunds | HBP portion only | Maximum down payment |
If you open an FHSA but never purchase a qualifying home, you have until the end of the 15th year after opening (or December 31 of the year you turn 71) to either make a qualifying withdrawal or transfer the balance to your RRSP or RRIF — without using RRSP contribution room. This is a highly attractive fallback: you got the tax deduction on the way in, the growth inside the FHSA was tax-free, and the transfer to RRSP doesn't cost you RRSP room. See our FHSA-to-RRSP transfer guide.
Earn up to 4.5% while your FHSA savings grow. No fees — every dollar counts toward your down payment. Code 45ET55JSYA.