Key Takeaway

The RRSP Home Buyers Plan (HBP) allows eligible first-time home buyers in Canada to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) tax-free to buy or build a qualifying home. You have 15 years to repay the withdrawal back into your RRSP, starting the second year after you withdraw. If you have a spouse or common-law partner who also qualifies, you can each withdraw up to $60,000, for a combined total of $120,000 toward your down payment.

How the Home Buyers Plan Works

The HBP lets you borrow from your own retirement savings without paying tax on the withdrawal, as long as you use the funds to buy or build a qualifying home and you repay the amount within the required timeframe. According to the Canada Revenue Agency, you can withdraw up to $60,000 from your RRSP in a single calendar year or over a short period spanning two calendar years (CRA, 2026).

The funds must be in your RRSP for at least 90 days before you can withdraw them under the HBP. You must have a written agreement to buy or build a qualifying home before October 1 of the year after the year of withdrawal, and you must intend to occupy the home as your principal residence within one year of buying or building it.

Eligibility Requirements

To use the HBP, you must be considered a first-time home buyer. This means you cannot have owned a home that you occupied as your principal residence at any time during the four-year period beginning January 1 of the fourth year before the withdrawal and ending 31 days before the withdrawal. If you previously owned a home but have not lived in one you owned for at least four years, you may qualify again.

You must be a resident of Canada when you withdraw the funds and up to the time you buy or build the home. If you have a spouse or common-law partner, they must also meet the first-time buyer test to withdraw from their own RRSP under the HBP, unless you are buying the home for a related person with a disability.

Repayment Rules

You must repay the full amount you withdrew over a maximum period of 15 years. Repayment begins the second year after the year you made the withdrawal. Each year, you must repay at least one-fifteenth (approximately 6.67 per cent) of the total amount withdrawn. You make repayments by contributing to your RRSP and designating the contribution as an HBP repayment on your tax return.

If you do not repay the minimum amount in a given year, the CRA will include that amount as taxable income on your tax return for that year. You can repay more than the minimum in any year to reduce your future repayment obligations, but you cannot repay less without tax consequences.

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When the HBP Makes Sense

The HBP works best when you have RRSP savings you can access and you need additional funds for a down payment. A larger down payment can help you avoid or reduce CMHC mortgage default insurance (required when your down payment is less than 20 per cent of the purchase price) and may qualify you for a better mortgage rate.

However, withdrawing from your RRSP means those funds are no longer growing tax-sheltered for retirement. You also lose the contribution room permanently once you withdraw, even after you repay. The Financial Consumer Agency of Canada notes that buying a home is a major financial decision, and you should consider all available down payment sources and the long-term impact on your retirement savings (FCAC, 2026).

The HBP is particularly useful if you have been contributing to an RRSP specifically to save for a down payment, or if you are confident you can meet the repayment schedule without compromising your future retirement contributions.

Next Steps

If you think the Home Buyers Plan fits your situation, confirm your eligibility and calculate how much you can withdraw using the CRA guidelines. Check how long your RRSP contributions have been in the account (the 90-day rule), and plan your repayment schedule before you withdraw. Consult with a licensed mortgage broker or financial advisor to compare the HBP against other down payment strategies, including the Tax-Free First Home Savings Account (FHSA), which you may be able to use alongside the HBP for additional tax-advantaged savings.

Financial Disclaimer: This article provides general educational information about the RRSP Home Buyers Plan and is not personalized financial, tax, or legal advice. Eligibility, withdrawal limits, and repayment rules are set by the Canada Revenue Agency and may change. Your personal tax situation, retirement goals, and mortgage options vary. Consult a licensed financial advisor, tax professional, or mortgage broker for advice specific to your circumstances before making any withdrawal or home purchase decision.