FHSA vs Home Buyers Plan Comparison Canada

What the FHSA vs HBP comparison does

The real question is whether the money you bring to closing is yours or borrowed from your future self, and what that difference is worth to you. The tool runs the same annual savings budget down both routes over the same horizon at the same return, and shows what each puts in your hand and what it leaves you owing.

Both routes start with a deduction, so comparing them on the refund alone tells you little. The difference shows up afterwards.

How the two routes work

The First Home Savings Account combines features of an RRSP and a TFSA. Contributions are deductible, growth is untaxed, and a qualifying withdrawal for a first home is tax-free and never repaid. The limit is the pace: $8,000 a year and $40,000 in total, so a large budget cannot go in at once.

The Home Buyers’ Plan lets you withdraw up to $60,000 from your RRSP for a first home without tax on the withdrawal. You took the deduction when you contributed, and starting in the second year after the withdrawal you repay it into your RRSP over fifteen years. Any year you fall short, the shortfall is added to your taxable income and the room is lost.

Money contributed to an RRSP within 90 days of the withdrawal cannot be taken out under the plan, so funding the RRSP the week before closing does not work.

What the calculator models

Each year the calculator puts what fits into the registered account for each route: up to the FHSA annual limit, capped by the lifetime limit, or the year’s RRSP room, a percentage of your income up to an annual dollar limit.

Anything the registered account cannot take goes into a side account earning the same return, as does the tax refund if you choose to reinvest it. That keeps the comparison fair: both routes start from the same budget.

Refunds are calculated by running the federal and provincial brackets with and without the contribution, rather than multiplying by a headline rate. Quebec residents get a slightly smaller refund because the abatement of basic federal tax is applied.

A worked example

With the default inputs ($8,000 a year for five years, 5% return, $85,000 income in Ontario, a $25,000 existing RRSP, refunds reinvested, and a 20% down payment on a $600,000 home), the FHSA route reaches about $57,312 at closing and the Home Buyers’ Plan route about $73,107. Both produce about $11,860 of refunds. Against the $120,000 down payment, the FHSA route is about $62,688 short and the HBP route about $46,893 short. The HBP route’s $60,000 withdrawal must be repaid at $4,000 a year, about $333 a month, for fifteen years.

Why the borrowed route often looks bigger

An existing RRSP balance is available immediately, and five years of new FHSA savings cannot compete with a balance that has been growing since your first job. The Home Buyers’ Plan maximum is also larger than an FHSA can hold after a few years. When the account limits bind, the plan wins on volume.

It does not make the money yours. A $60,000 withdrawal is $4,000 a year going back into the RRSP for fifteen years, in the same years you are carrying a new mortgage, property tax and the other costs of a first home. Repayments also earn no new deduction, because you already took it, which is a real cost that the balance comparison does not show.

When each route wins

The FHSA is better when the horizon is long enough to fill it, when you do not already have a large RRSP, and when the repayments would be a strain. Many people also simply prefer not to carry an obligation into their first years of owning a home.

Short horizons favour the plan: if you are buying in two years, the FHSA cannot build enough room to matter, while an existing RRSP is already there. The plan also wins when reaching 20% down is the goal, because avoiding mortgage default insurance can be worth more than fifteen years of repayments. The calculator shows each route’s shortfall against your target, which usually settles the question.

The answer most people should reach

For a buyer with room and time, use both. Fill the FHSA first, because it is a deduction with no repayment, then add the Home Buyers’ Plan if the down payment still falls short. Set the reinvest-refund switch to match what you will really do; most people spend the refund, and turning it off gives a more realistic projection.

Reading the result

Compare the two available amounts, then the repayment, then each shortfall against your target. A route that reaches the target with no repayment beats one that overshoots it with a fifteen-year obligation, unless the overshoot is what gets you to 20% down.

Every figure is an estimate based on your numbers and the current published limits, not financial advice. Returns are assumed, eligibility for both plans depends on conditions this tool does not test, and repayment rules can change. Confirm with the CRA or an advisor before committing to either route.

About This Tool: FHSA vs HBP

FHSA vs HBP: use this tool to get an instant, accurate estimate. The figures follow official CRA guidance and every rate and threshold is kept up to date for 2026. Adjust the inputs above to match your situation, or browse all our calculators to plan your next step.