Understanding Canada’s Home Buyers’ Plan (HBP): How to Use Your RRSP to Buy a Home
Buying a home is one of the biggest financial milestones most Canadians will ever achieve. Between saving for a down payment, covering closing costs, and qualifying for a mortgage, many prospective homebuyers are looking for ways to make homeownership more affordable.
One of the most valuable tools available to Canadians is the Home Buyers’ Plan (HBP). This federal program allows eligible homebuyers to withdraw funds from their Registered Retirement Savings Plan (RRSP) to help purchase or build a home without paying tax on the withdrawal.
At The Collin Bruce Mortgage Team, clients often ask whether the Home Buyers’ Plan is worth using and how it fits into an overall home-buying strategy. Here’s what every Canadian homebuyer should know.
What Is the Home Buyers’ Plan?
The Home Buyers’ Plan is a government program that allows eligible Canadians to withdraw up to $60,000 from their RRSP to purchase or build a qualifying home. If both partners qualify, a couple can access up to $120,000 combined, providing a substantial boost toward a down payment.
Unlike a regular RRSP withdrawal, funds withdrawn through the Home Buyers’ Plan are not immediately taxed, provided all program requirements are met and the money is repaid according to the program rules.
Who Qualifies for the Home Buyers’ Plan?
To participate in the HBP, you must meet several eligibility requirements, including:
- Be considered a first-time homebuyer.
- Have a written agreement to buy or build a qualifying home.
- Be a Canadian resident when making the withdrawal.
- Intend to occupy the home as your principal residence within one year of purchase.
Many Canadians are surprised to learn that “first-time homebuyer” doesn’t necessarily mean you’ve never owned a home. In many cases, you may qualify if you have not occupied a home you owned (or that your spouse or common-law partner owned) as your principal residence during the current year or the previous four calendar years.
How Much Can You Withdraw?
As of 2026, eligible participants can withdraw up to $60,000 from their RRSP under the Home Buyers’ Plan. This increased limit gives buyers significantly more flexibility than previous versions of the program.
For example:
- One qualifying buyer can withdraw up to $60,000.
- Two qualifying buyers purchasing together can withdraw up to $120,000.
This can make a substantial difference when it comes to reaching a down payment target, reducing mortgage insurance premiums, or lowering monthly mortgage payments.
The 90-Day RRSP Rule
One detail that many buyers overlook is the RRSP contribution timing requirement.
Funds must generally remain in your RRSP for at least 90 days before being withdrawn under the Home Buyers’ Plan. Contributions made shortly before the withdrawal may not qualify for the same tax advantages if this requirement is not met.
For buyers planning to purchase within the next year, it is often beneficial to begin contributing to an RRSP as early as possible to maximize both tax deductions and HBP eligibility.
Do You Have to Repay the Money?
Yes.
The Home Buyers’ Plan is essentially an interest-free loan from your RRSP to yourself. The amount withdrawn must be repaid to your RRSP over a 15-year period.
Each year, you’ll be required to repay a minimum portion of the amount you withdrew. If you fail to make the required repayment in a given year, that amount is added to your taxable income for that year.
This repayment requirement is one of the most important considerations when deciding whether to use the HBP.
Home Buyers’ Plan vs. FHSA: Which Is Better?
Since the introduction of the First Home Savings Account (FHSA), many buyers wonder which program they should use.
The good news is that you don’t necessarily have to choose.
Eligible buyers can often use both the FHSA and the Home Buyers’ Plan for the same home purchase. This strategy can significantly increase the amount available for a down payment while maximizing tax advantages.
Generally speaking:
FHSA Advantages
- Tax-deductible contributions.
- Tax-free growth.
- Tax-free withdrawals for a qualifying home purchase.
- No repayment required.
HBP Advantages
- Access to up to $60,000 from an RRSP.
- Can supplement FHSA savings.
- Provides additional purchasing power when needed.
The right strategy depends on your income, savings timeline, and homeownership goals.
Is Using the Home Buyers’ Plan a Good Idea?
For many first-time homebuyers, the answer is yes.
The HBP can help buyers:
- Reach a down payment target sooner.
- Reduce the amount borrowed.
- Lower monthly mortgage payments.
- Potentially avoid or reduce mortgage default insurance costs.
- Enter the housing market sooner rather than waiting years to save additional funds.
However, it’s important to remember that withdrawing from your RRSP means temporarily reducing your retirement investments. Buyers should carefully consider how the repayment requirements fit into their long-term financial plan.
How The Collin Bruce Mortgage Team Can Help
The Home Buyers’ Plan can be an excellent tool, but it’s most effective when combined with a well-structured mortgage strategy.
The mortgage experts at The Collin Bruce Mortgage Team help clients understand how programs like the HBP, FHSA, and other homebuyer incentives can work together to maximize purchasing power while supporting long-term financial goals.
Whether you’re buying your first home, upgrading to a larger property, or simply exploring your options, getting professional mortgage advice early can help you make informed decisions and avoid costly mistakes.
Ready to Buy Your First Home?
If you’re considering using the Home Buyers’ Plan as part of your home-buying strategy, The Collin Bruce Mortgage Team can help you understand your options and determine how much home you can afford.
Contact our team today to discuss your mortgage goals and create a personalized plan for homeownership.across Canada.
Have questions? Give us a call and we’ll be happy to walk you through the home-buying process.
