FHSA & RRSP Home Buyers’ Plan: A Guide for Ottawa First-Time Buyers
For first-time buyers in Ottawa, the FHSA and RRSP Home Buyers’ Plan are two of the most powerful down-payment tools available, and using them together can meaningfully change what you can afford in Kanata, Stittsville, Barrhaven and the surrounding west-end communities.
The First Home Savings Account offers tax-deductible contributions and tax-free withdrawals, while the RRSP Home Buyers’ Plan lets you draw from your own retirement savings without immediate tax. Jason Polonski, an Ottawa REALTOR® with Right at Home Realty and more than 15 years guiding local buyers, sees regularly how the right account strategy turns a tight budget into a confident purchase. This guide explains how each program works in 2026, how they fit together, and what Ottawa buyers should plan for before they start house-hunting.
What the FHSA and RRSP Home Buyers’ Plan Actually Are
These are two separate federal registered programs, each designed to help Canadians fund a first home. They share a goal but follow very different rules, and understanding the distinction is the foundation of any sound plan.
The First Home Savings Account is a registered account introduced in 2023 specifically for first-time buyers. Contributions are tax-deductible like an RRSP, and qualifying withdrawals to buy a home are entirely tax-free like a TFSA. According to the Government of Canada’s FHSA overview, the money you put in and the growth it earns can come out without ever being taxed, provided you meet the conditions.
The RRSP Home Buyers’ Plan is older and works differently. It lets you withdraw from an existing RRSP to fund a first home, but the withdrawal is effectively a loan to yourself that must be repaid. The Canada Revenue Agency’s Home Buyers’ Plan page sets out the current withdrawal ceiling and repayment framework that govern the program.
2026 Contribution and Withdrawal Limits
The numbers matter because they set the ceiling on how much tax-advantaged money you can bring to the table. Here is where the two programs stand in 2026.
| Feature | FHSA | RRSP Home Buyers’ Plan |
|---|---|---|
| Annual contribution limit | $8,000 | Based on RRSP room (18% of prior earned income, to the annual max) |
| Lifetime/withdrawal cap | $40,000 lifetime | $60,000 per withdrawal cycle |
| Contributions tax-deductible | Yes | Yes |
| Withdrawal taxed | No | No, if repaid on schedule |
| Repayment required | No | Yes, over 15 years |
The FHSA annual limit is $8,000 with a $40,000 lifetime maximum, and unused room can carry forward one year only, up to a combined $16,000 in a single year. The Financial Consumer Agency of Canada provides a clear breakdown of how this carry-forward mechanism functions.
On the RRSP side, the federal government raised the Home Buyers’ Plan withdrawal limit to $60,000 per person in 2024, up from $35,000. For a couple where both partners qualify, that means up to $120,000 can come from RRSPs alone. Because repayment timing rules have been adjusted for recent withdrawals, buyers should confirm the current schedule directly with the CRA before withdrawing.
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How the FHSA & RRSP Programs Work Together
This is where Ottawa buyers gain real leverage. The FHSA and the Home Buyers’ Plan are not mutually exclusive, and both can be used for the same purchase.
A buyer who has maximized an FHSA at $40,000 and withdraws the full $60,000 under the Home Buyers’ Plan can assemble $100,000 toward a down payment from registered accounts alone. A qualifying couple can roughly double that. In a market where the typical Ottawa home price tracks the data published by the Canadian Real Estate Association, that combined capacity often makes the difference between a minimum 5% down payment and a position strong enough to avoid overstretching.
The order of operations most advisors recommend is to fill the FHSA first, because its withdrawals are permanently tax-free and never need to be repaid. The Home Buyers’ Plan then supplements that amount when more is needed. Jason often walks west-end clients through this sequencing early, well before they’re booking showings, so the savings strategy and the home search move in step rather than colliding at the offer stage.
Why the FHSA Usually Comes First
The FHSA’s defining advantage is that nothing comes back out of your pocket later. There is no repayment obligation, so the withdrawal genuinely reduces what you owe rather than deferring it.
The Home Buyers’ Plan, by contrast, must be repaid into your RRSP over 15 years. Miss a scheduled repayment, and that portion is added to your taxable income for the year. The commitment is manageable, but it’s a real line in your future budget that belongs in your broader picture of the monthly cost of owning a home in Ottawa.
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Eligibility Rules Ottawa Buyers Should Confirm
Both programs hinge on first-time buyer status, defined as not having owned a home you lived in during the current year or the four preceding calendar years. This four-year window means some buyers who previously owned property requalify after a period of renting.
For the FHSA, you must be a Canadian resident between 18 and 71 and meet the first-time buyer test when you open the account. For the Home Buyers’ Plan, you need a written agreement to buy or build a qualifying home and the intention to occupy it as your principal residence within a year. The Ontario government’s homebuyer resources summarize related provincial considerations that apply to purchases in Ottawa.
A strong down payment also affects mortgage qualification. Lenders apply the mortgage stress test to confirm you could handle higher rates, so it helps to understand what salary you need to buy a home in Ottawa before you set a savings target.
Building the Rest of Your Down Payment
Registered accounts rarely cover everything, so most Ottawa buyers blend them with other savings and, where it fits, mortgage insurance for down payments under 20%. The Canada Mortgage and Housing Corporation explains how insured mortgages work and what minimum down payments apply at different price tiers.
Your down payment is only one part of the equation. It helps to map the full cost to buy a house early, including the closing costs in Ontario such as land transfer tax and legal fees, plus the hidden costs of buying a home in Ontario that catch buyers off guard. Keeping registered funds separate from your closing budget prevents an FHSA or RRSP withdrawal from being quietly eaten up by fees.
Rates, Terms and Your Buying Power
Interest rates influence how much house your savings translate into. Buyers tracking borrowing costs can follow the Bank of Canada’s policy rate decisions, which feed directly into mortgage qualification and monthly affordability. Understanding how interest rates affect buying power helps you decide how aggressively to save and when to lock in.
The structure of your mortgage matters just as much as the rate. Getting familiar with the mortgage terms Ottawa buyers should know and weighing a fixed versus variable rate mortgage will shape your monthly payment and your flexibility down the road.
Planning Around Ottawa’s West-End Market
Account strategy only works when it’s grounded in the realities of the local market, and Ottawa’s communities each carry their own price patterns and inventory dynamics.
In areas like Kanata and Stittsville, where family-oriented buyers frequently compete for detached and townhome inventory, a well-funded down payment strengthens an offer and can reduce reliance on conditions. Barrhaven and Nepean see similar pressure at certain price points. Knowing how much registered savings you can deploy, and exactly when those funds become accessible, shapes how decisively you can move when the right property appears.
Timing is the detail buyers most often underestimate. FHSA withdrawals require the account to have been open and to meet conditions, and Home Buyers’ Plan withdrawals must follow the CRA’s process and deadlines, including completing Form T1036 through your financial institution. Coordinating these withdrawals with your closing date and your lender’s requirements is something Jason addresses directly, so funds arrive when the deal needs them, not after.
About Jason Polonski
This guide is brought to you by Jason Polonski, an Ottawa REALTOR® with Right at Home Realty who has spent more than 15 years helping first-time buyers, families, and move-up homeowners across Kanata, Stittsville, Barrhaven, Nepean, Manotick, Carp, and the wider Ottawa region.
His background is a genuine advantage on both sides of a purchase. A B.Comm in marketing and finance from Concordia gives him a firm grasp of the numbers behind a down payment, while hands-on experience in construction and the electrical trades lets him read a property’s condition and systems the way few agents can. That combination helps clients connect the financial side of a purchase to the practical realities of the home itself.
Available seven days a week and recognized among Ottawa’s top REALTORS® for seven consecutive years, Jason is the local guide many west-end buyers turn to when they’re ready to make their next move. The FHSA and RRSP Home Buyers’ Plan are powerful on their own, but paired with local guidance and a clear plan, they become a genuine path into your first Ottawa home. To talk through your own first-home strategy, reach Jason at (613) 601-9333.
FHSA & RRSP (FAQs)
Yes. The two programs are separate and can be combined for the same qualifying home, as long as you meet each program’s conditions at the time of withdrawal. A buyer who maxes a $40,000 FHSA and withdraws the full $60,000 under the Home Buyers’ Plan can bring up to $100,000 toward a down payment from registered accounts alone, while a qualifying couple can roughly double that.
The FHSA annual contribution limit is $8,000, with a $40,000 lifetime maximum. Unused room carries forward one year only, so if you contribute nothing in a given year, you could contribute up to $16,000 the following year. Contribution room only begins accumulating once you open the account, which is why opening one early matters even if you deposit just a small amount.
As of 2026, you can withdraw up to $60,000 per person from your RRSP under the Home Buyers’ Plan, increased from the previous $35,000 limit in 2024. A couple where both partners qualify and have sufficient RRSP funds can withdraw up to $120,000 combined toward a first home.
No. Qualifying FHSA withdrawals used to buy a first home are completely tax-free and never need to be repaid. This is the FHSA’s key advantage over the Home Buyers’ Plan, which functions as a loan from your own RRSP that must be repaid over time.
Funds withdrawn under the Home Buyers’ Plan must be repaid into your RRSP over 15 years, with repayments beginning the second year after the withdrawal. On a full $60,000 withdrawal, that works out to roughly $4,000 per year. If you miss a scheduled repayment, that portion is added to your taxable income for the year.
For both programs, you generally qualify if you did not own and live in a home during the current calendar year or the four preceding calendar years. This four-year window means some buyers who previously owned property can requalify after a period of renting. You must also be a Canadian resident, and for the FHSA, between 18 and 71 years old.
Most advisors suggest filling the FHSA first because its withdrawals are permanently tax-free and require no repayment, making it the more efficient tool. The Home Buyers’ Plan then supplements your down payment when you need more than the FHSA can provide. The right order can depend on your income, existing RRSP balance, and timeline, so it’s worth mapping out before you start house-hunting.
Timing is critical. FHSA withdrawals require the account to be open and to meet all conditions, and Home Buyers’ Plan withdrawals follow the CRA’s process, including completing Form T1036 through your financial institution within set deadlines. Coordinating these withdrawals with your closing date and your lender’s requirements ensures the funds arrive when the deal needs them, which is something a local REALTOR® can help you plan around.
