TL;DR

Most expensive HBP mistakes come from missing timelines, underestimating repayment impact, or using HBP when FHSA-first or mixed strategies are a better fit.

What the HBP is in 2026

CRA currently states the Home Buyers Plan withdrawal limit is $60,000 per participant. You can withdraw from your RRSPs to buy or build a qualifying home for yourself, or for a specified disabled person under program rules.

You can make multiple withdrawals, but generally only in the same calendar year as your first withdrawal and in January of the following year.

Use HBP as a structured strategy, not a last-minute cash patch.

HBP eligibility and file-readiness checklist

  • You are generally treated as a first-time buyer if you did not live in a qualifying owned home in the current year before withdrawal (except the 30 days right before withdrawal) or in the previous four calendar years.
  • You must have a written agreement to buy or build a qualifying home. A mortgage pre-approval alone does not satisfy this requirement.
  • You must be a resident of Canada when you withdraw and through the required period set by CRA conditions.
  • You must intend to occupy the home as your principal residence within one year of buying or building.
  • If you previously used HBP, your HBP balance usually must be zero on January 1 of the withdrawal year to re-participate.

Critical timeline rules most buyers miss

CRA participation guidance currently states that the qualifying home generally must be acquired or built before October 1 of the year after your first withdrawal, unless specific extension scenarios apply.

If that deadline is not met and qualifying conditions are not preserved, CRA may require cancellation and your withdrawals can become taxable.

Repayment timing: use exact dates, not assumptions

Repayment start timing depends on when your first HBP withdrawal occurred

First HBP withdrawal period When repayment starts What this means
Before January 1, 2022 Second year after withdrawal year Faster repayment start, less deferral flexibility.
Between January 1, 2022 and December 31, 2025 Fifth year after withdrawal year (temporary repayment relief) Three extra years before repayment starts. Example: first withdrawal in 2022 means first repayment year is 2027.

CRA also states the repayment period itself is still 15 years once it begins.

RRSP Home Buyers Plan strategy in Canada planning discussion for Canadian borrowers
Date precision protects you from avoidable tax and cash-flow surprises.

HBP vs alternatives: what to use instead or alongside

HBP is not always the best first move. Use this alternatives framework

  1. FHSA-first strategy: often strongest for eligible first-time buyers because contributions are generally deductible and qualifying withdrawals are tax-free with no repayment.
  2. HBP plus FHSA strategy: useful when one account alone does not cover target down payment needs.
  3. TFSA and cash reserve strategy: useful when purchase timing is uncertain and liquidity is critical.
  4. Gifted down payment strategy: useful when family support is available and documentation is clean.
  5. Smaller first-home strategy: useful when account optimization still leaves the monthly payment too thin.
HBP decision matrix (practical planning view)
Path Strength Primary caution Best fit
HBP only Immediate capital from existing RRSP assets Future repayment obligation Stable cash flow and clear repayment capacity
FHSA first Tax-efficient contribution plus qualifying tax-free withdrawal Eligibility and room constraints Eligible buyers building over a 12-36 month horizon
HBP + FHSA Larger total funding flexibility Higher coordination complexity Higher target purchase ranges with disciplined planning
TFSA / cash heavy Liquidity and optionality No upfront deduction benefit Uncertain timelines and higher volatility tolerance

Behavior traps that cause bad HBP decisions

Mental model Common mistake Pragmatic correction
Anchoring Focusing only on $60,000 maximum and ignoring repayment load. Model year-by-year HBP repayment against your first ownership-year budget.
Present bias Optimizing closing today while underweighting retirement opportunity cost. Compare HBP use against FHSA-first and mixed-account scenarios before committing.
Goal-gradient effect Rushing final withdrawals without timeline compliance checks. Use a dated checklist for written agreement, withdrawal window, and acquisition deadline.
RRSP Home Buyers Plan strategy in Canada documents and calculator in warm sunset light
Scorecards reduce emotional account decisions near closing deadlines.

60-day HBP execution plan

  1. Days 1-15: verify HBP eligibility, zero-balance status (if re-participating), and account-level withdrawal readiness.
  2. Days 16-30: align written agreement and withdrawal timeline with your planned close date.
  3. Days 31-45: map repayment-start year and annual repayment burden under your expected cash-flow profile.
  4. Days 46-60: compare HBP-only vs FHSA-first vs mixed stack and lock the lowest-risk path.

Best next step

If you are considering HBP, make the account decision and timeline decision together, not separately.

Sources