Is the FHSA better than the RRSP Home Buyers' Plan?

For most first-time buyers, yes. Both give you a tax deduction on the way in, but an FHSA withdrawal for a qualifying home is permanently tax-free with nothing to repay, while the HBP is a loan from yourself that must be repaid to your RRSP over 15 years. Missed HBP repayments are added to your taxable income. The FHSA's drawback is its smaller cap: $40,000 versus $60,000.

What happens to my FHSA if I never buy a home?

You can transfer the full balance, including growth, into an RRSP or RRIF tax-free, and the transfer does not use any of your RRSP contribution room. That makes the FHSA close to risk-free from a tax standpoint: worst case, it becomes extra RRSP room you would not otherwise have had. If you withdraw the money as cash instead, it is fully taxable.

Who counts as a first-time home buyer for the FHSA?

You qualify if you did not live in a qualifying home that you or your spouse or common-law partner owned as your principal place of residence in the current calendar year or the previous four calendar years. You must also be a Canadian resident, at least 18 (19 in some provinces), and not older than 71 at the end of the year you open the account.

FHSA vs RRSP (HBP) vs TFSA: which builds a bigger down payment?

All three shelter your savings from tax, but they cap you differently, refund you differently, and only one of them has to be paid back. Enter your plan and see the actual down payment each route produces — with the real $8,000 annual / $40,000 lifetime FHSA caps and the $60,000 Home Buyers' Plan limit.

Not sure which account fits your situation? → Read the FHSA decision guide.

How much can you save per year?

Total you can put aside annually toward a home.

Years until you buy

Marginal tax rate

Combined federal + provincial. Approximate — rates vary by province.

Expected annual return

Shorter timelines usually call for lower-risk, lower-return holdings.

Do you reinvest your tax refunds?

The FHSA and RRSP generate refunds; the TFSA does not.

Best single account for your plan — —

FHSA$—

Contributed$—

Tax refunds generated$—

Owed back later$0

RRSP → Home Buyers' Plan$—

Contributed$—

Tax refunds generated$—

Must repay to RRSP$—

TFSA$—

Contributed$—

Tax refunds generated$0

Owed back later$0

FHSA + HBP together$—

From FHSA (nothing to repay)$—

From HBP (repayable)$—

Annual HBP repayment, 15 yrs$—

—

How each account actually works

The three accounts differ on three axes: whether contributions are deductible, whether withdrawals are taxed, and whether the money has to be repaid.

	FHSA	RRSP + HBP	TFSA
Annual contribution cap	$8,000	18% of income (to the annual RRSP ceiling)	$7,000
Lifetime cap for a home	$40,000	$60,000 withdrawal	No cap (room accumulates)
Contribution deductible?	Yes	Yes	No
Withdrawal taxed?	No, for a qualifying home	No, if repaid on schedule	No
Repayment required?	None	Over 15 years	None
Room restored after withdrawal?	Account closes	Repayments restore the RRSP	Yes, the following January

The FHSA is the only one that is deductible going in and tax-free coming out and never has to be repaid. That combination is why it usually wins per dollar contributed — its real weakness is the size of the bucket, not the tax treatment.

The FHSA rules that catch people out

Room only starts when you open the account

Unlike the TFSA, FHSA room does not accrue in the background from age 18. You get $8,000 of room in the year you open your first FHSA, and nothing before that. Opening an account costs nothing and starts the clock — many advisors suggest opening one as soon as you might plausibly buy within 15 years, even with a $0 contribution.

Carry-forward is capped at $8,000

Unused room carries forward, but only one year's worth. Skip two years and the third year's room is still $16,000, not $24,000. This makes the FHSA less forgiving than the TFSA about irregular saving.

this year's room = $8,000 + min($8,000, unused room from last year)
maximum in any single year = $16,000 · lifetime maximum = $40,000

The clock runs out

Your FHSA must close by the earliest of: the end of the year of its 15th anniversary, the end of the year you turn 71, or the end of the year after your first qualifying withdrawal.

The deduction can be banked

You do not have to claim the deduction in the year you contribute. A student or early-career buyer can contribute now and carry the deduction forward to a year when their income — and therefore their marginal rate — is higher. The refund is worth more later.

Worked example: $10,000 a year for five years at a 30% marginal rate

Assuming a 4% return and refunds reinvested:

Route	Available for down payment	Refunds generated	Repayment owed
FHSA alone	$45,064	$12,000	$0
RRSP → HBP	$60,000 (the withdrawal cap)	$19,596	$60,000 over 15 years
TFSA alone	$39,431	$0	$0

The FHSA fills its $40,000 lifetime room in exactly five years at this rate and finishes at $45,064. The RRSP grows to about $73,000, but only $60,000 of that can leave under the Home Buyers' Plan — the rest stays locked for retirement. The TFSA finishes lowest here purely because its $7,000 annual room is the smallest of the three.

Read those numbers carefully: the RRSP route puts the most cash on the table at closing, but $60,000 of it is a loan from your future self, repayable at $4,000 a year for 15 years. Miss a repayment and that year's share is added to your taxable income. The FHSA produces slightly less cash with nothing owed — and because you can use both for the same home, the highest-capacity plan is FHSA first, HBP second.

Use the calculator above with your own numbers; the ranking flips depending on your tax rate, timeline, and how much you can actually save each year.

FHSA questions, answered

What is the FHSA contribution limit?

$8,000 per year, $40,000 lifetime. Unused room carries forward only up to $8,000, so the maximum in any single year is $16,000. Room starts accumulating when you open the account, not at age 18.

Can I use the FHSA and the Home Buyers' Plan together?

Yes. The CRA confirms you can make a qualifying FHSA withdrawal and an HBP withdrawal for the same qualifying home, provided you meet each program's conditions at the time of each withdrawal.

Is the FHSA better than the HBP?

Per dollar, usually yes: both are deductible going in, but the FHSA comes out tax-free with nothing to repay, while the HBP must be repaid to your RRSP over 15 years. The HBP's advantage is size — $60,000 versus $40,000. Most buyers who can save enough should use both.

What if I never buy a home?

Transfer the full balance, including growth, to an RRSP or RRIF tax-free — and it does not consume any RRSP contribution room. That is the feature that makes an unused FHSA close to harmless. Taking the money as cash instead makes it fully taxable.

Who counts as a first-time home buyer?

You must not have lived in a qualifying home that you or your spouse or common-law partner owned as your principal residence in the current year or the previous four calendar years. You must also be a Canadian resident, 18 or older (19 in some provinces), and 71 or younger at the end of the year you open the account.

Can a couple each have one?

Yes, if both qualify individually — that is up to $80,000 of combined FHSA contributions plus growth, and up to $120,000 combined if both also use the HBP. Note the first-time-buyer test looks at your spouse's ownership too, so if one partner owned a home you lived in recently, the other may be disqualified.

What happens if I overcontribute?

The CRA charges 1% per month on the excess amount until it is withdrawn or absorbed by new room. As with the TFSA, this accrues silently — track your own contributions rather than relying on the CRA's figure, which lags by up to a year.

Method and sources

The calculator contributes at the start of each year, applies the account's cap, grows the balance at your chosen rate, and (if selected) adds the prior year's refund to the following year's savings. FHSA room is modelled as $8,000 per year plus up to $8,000 of carry-forward, capped at $40,000 lifetime; TFSA room as $7,000 per year with unlimited carry-forward; the HBP withdrawal is capped at $60,000. Tax refunds are estimated as contribution × your marginal rate, which assumes the deduction does not push you into a lower bracket.

Figures are current for 2026 and drawn from: CRA — First Home Savings Account, CRA — Home Buyers' Plan, and CRA — TFSA. HBP repayments generally begin the second calendar year after the year of withdrawal; a temporary extension applied to withdrawals made in 2022–2025, so confirm your own start year with the CRA.