Can I Use Both the FHSA and the Home Buyers' Plan?
Yes — the First Home Savings Account and the Home Buyers' Plan can both be used, on the same home, in the same purchase. They are different instruments with different costs, and the reason to understand both is that one of them is a grant-like deduction you never repay and the other is a loan from yourself.
- The answer:: An FHSA contribution is deductible and a qualifying withdrawal is tax free, with nothing to repay. The Home Buyers' Plan withdraws from an RRSP tax free but must be repaid over a set schedule.
- The trap:: Missing an HBP repayment does not attract a penalty as such — the shortfall is simply added to your income for that year, which is a tax bill arriving in the years you are least expecting one.
- The recommendation:: Open an FHSA as soon as you plausibly might buy, because contribution room only starts accruing once the account exists.
Where the AI summary above gets this wrong
"You have to choose between the FHSA and the Home Buyers' Plan for your first home."
That's surface-true. Here's what it misses:
- They can be combined — Both may be used for the same qualifying home purchase. Nothing in either set of rules requires you to pick one.
- Only one has to be repaid — An FHSA qualifying withdrawal is final: there is no repayment schedule. The Home Buyers' Plan is a withdrawal from your own RRSP that must be repaid over a set number of years.
- Room starts when the account opens — FHSA contribution room does not accrue from the year you became eligible. It starts when you open the account, which is why opening one early costs nothing and waiting does.
01 What each account actually is
The FHSA combines the two features people usually have to choose between: contributions are deductible against income like an RRSP, and a qualifying withdrawal to buy a first home is tax free like a TFSA. There is no repayment.
The Home Buyers' Plan is different in kind. It lets you withdraw from your RRSP without the withdrawal being taxed, on condition that you repay it into your RRSP over a set schedule. It is your own money, lent to yourself, with a repayment obligation attached.
02 Why the FHSA comes first
The FHSA deduction is permanent and the withdrawal is final. Nothing has to be returned, which makes each dollar of FHSA room strictly better than a dollar of HBP withdrawal for the same purchase.
The HBP is still worth using once the FHSA is full, because access to a larger deposit generally matters more than the repayment obligation. But the order is not arbitrary, and reversing it costs you the difference.
Source: What is the Home Buyers' Plan?
03 The room problem nobody warns you about
FHSA contribution room begins accruing only once the account is opened. Unlike RRSP or TFSA room, it does not build up quietly in the background from the year you first qualified.
The practical consequence is that opening an FHSA is the action, not contributing to it. Someone who opens one at 25 and contributes nothing for three years has room available that someone who opens theirs at 28 does not. The compounding effect of that head start is what the calculator shows.
Shows: what an amount becomes after your chosen number of years at a fixed return. Ignores: tax, fees, inflation, and any variation in returns from year to year.
04 What repayment actually looks like
HBP repayments start after a grace period and run over a fixed number of years, with a portion due annually. A repayment is not a new contribution: it uses no RRSP room and generates no deduction.
If you repay less than the amount due in a year, the shortfall is included in your income for that year. That is the mechanism people describe as a penalty, and it lands during the years when a new homeowner's budget is usually tightest.
The repayment obligation attached to the older of the two programs is what most affects a household's cash flow afterwards, and it is set out in the Home Buyers' Plan, which is where the fifteen-year repayment schedule begins.
Source: Contributing to an RRSP or PRPP
The detail that costs people real money here is not the choice between the two accounts, it is that FHSA room starts when you open the account. I have watched someone decide they were not ready to save yet and therefore not open one, which is exactly backwards: opening it is free, and it is the only part that has a deadline attached.
FAQ
Can I use the FHSA and the Home Buyers' Plan on the same home?
Yes. Both may be used for the same qualifying purchase, and nothing in either set of rules requires you to choose. The usual order is to use the FHSA first, since a qualifying FHSA withdrawal never has to be repaid.
Do I have to repay an FHSA withdrawal?
No. A qualifying withdrawal from an FHSA to buy a first home is tax free and final. That is the main difference from the Home Buyers' Plan, which withdraws from your RRSP on condition that you repay it over a set schedule.
When should I open an FHSA?
As soon as you plausibly might buy, because contribution room starts accruing when the account is opened rather than from the year you became eligible. Opening one and contributing nothing still builds room.
Sources
Regulator references
- First Home Savings Account (FHSA) · Canada Revenue Agency · 2025FHSA eligibility, annual and lifetime limits, and qualifying withdrawals.Last verified: 2026-09-07
- What is the Home Buyers' Plan? · Canada Revenue Agency · 2025The HBP withdrawal limit, eligibility and the repayment schedule.Last verified: 2026-09-07
- Contributing to an RRSP or PRPP · Canada Revenue Agency · 2025How RRSP deduction limits are set and that unused room carries forward.Last verified: 2026-09-07
- Tax-Free Savings Account contributions · Canada Revenue Agency · 2025TFSA contribution room, carry-forward, and the rule on re-contributing withdrawals.Last verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-09-07 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.