What the Home Buyers' Plan does
The Home Buyers' Plan lets eligible buyers withdraw RRSP funds to buy or build a qualifying home, subject to CRA conditions. It can improve cash-to-close when savings are inside an RRSP.
It is not free money. Withdrawals normally need to be repaid over time, and missed repayments can become taxable income.
Withdrawal limit and timing
CRA states the HBP withdrawal limit is $60,000 for withdrawals made after April 16, 2024. Eligibility, forms, timing, and repayment rules still apply.
Do not assume every RRSP deposit is immediately usable. If you are planning an RRSP contribution or transfer before purchase, confirm timing with CRA guidance and your tax advisor before relying on those funds.
RRSP HBP vs FHSA
The FHSA is often more attractive for eligible first-time buyers because qualifying withdrawals can be tax-free without the same repayment obligation. RRSP HBP can still help if you already have RRSP savings or want to stack sources.
The right answer is usually a source stack: savings, FHSA, RRSP HBP, gifts, and closing-cost buffer, all documented clearly for the lender.
| Source | Strength | Watch-out |
|---|---|---|
| FHSA | Tax-deductible contributions and tax-free qualifying withdrawals | Eligibility and contribution room |
| RRSP HBP | Access existing RRSP savings for a first home | Repayment obligation and timing rules |
| TFSA / cash | Flexible and simple for documentation | No RRSP/FHSA deduction advantage |
Mortgage qualification impact
Using existing RRSP savings generally does not create a new debt payment, but borrowing money to contribute to an RRSP can. If an RRSP loan is involved, the lender may include that payment in your debt ratios.
A first-home plan should model the down payment, closing costs, emergency buffer, and any new payment obligations before the offer is written.
A practical strategy
Use the RRSP HBP when it genuinely improves the purchase without draining long-term savings too far. Avoid using every available dollar if it leaves no room for inspections, adjustments, moving costs, or post-closing repairs.
Pragmatic Mortgage Lending can map FHSA, RRSP HBP, gifts, savings, closing costs, and lender documentation into one cash-to-close plan.