HBP (Home Buyers' Plan)

How the HBP works

The HBP is a loan from yourself. You pull money out of your RRSP without the withholding tax and income inclusion that normally apply to RRSP withdrawals, use it for your down payment, then pay it back into an RRSP over 15 years. As long as you stay on schedule, the whole round trip is tax-free.

The limit is $60,000 per person (as of July 2026), raised from $35,000 for withdrawals made after April 16, 2024. The limit is per individual, not per home: a couple where each partner qualifies can withdraw up to $60,000 from each of their own RRSPs, for $120,000 combined on the same purchase. You cannot dip into your spouse's RRSP under your own HBP; each person withdraws from their own plan.

A larger down payment does more than shrink your mortgage. If the HBP pushes your down payment to 20% or more of the purchase price, you also avoid mortgage default insurance, which can save thousands more.

Who qualifies

The rules are stricter than most people assume, and the CRA checks them. To make an HBP withdrawal you must meet all of the following:

• Be a first-time buyer: you did not live in a home you (or your current spouse or common-law partner) owned as your principal residence in the current calendar year before the withdrawal or in the previous four calendar years. You can requalify after a long enough gap, and there are exceptions after a breakdown of a marriage or common-law relationship.
• Have a written agreement to buy or build a qualifying home in Canada before you withdraw.
• Intend to occupy the home as your principal residence within one year of buying or building it.
• Be a resident of Canada from the withdrawal until the home is bought or built.

The 90-day rule (the 89-day trap)

Any contribution you plan to withdraw under the HBP must sit in the RRSP for at least 90 days before the withdrawal. Take it out on day 89 and the CRA can deny the RRSP deduction for that contribution, which quietly erases the tax benefit you thought you had.

This matters most for buyers who contribute a lump sum shortly before house hunting. If your closing date is close, count the days carefully, and remember the clock runs per contribution, not per account. Money that has been in the RRSP for years is not affected.

Repayment: 15 years, and a temporary grace period

You repay the HBP in equal instalments over 15 years, each instalment being 1/15 of what you withdrew. Normally repayments start the second year after the year of your withdrawal. Temporarily, withdrawals made from 2022 to 2025 got a five-year grace period before the first repayment is due, instead of two (as of July 2026). A 2026 withdrawal is back on the normal schedule, with the first repayment due for 2028.

Repayments are ordinary RRSP contributions that you designate as HBP repayments on Schedule 7 of your tax return. Because they are repayments, they do not create a new deduction and they do not use new contribution room; you already got the deduction when you first contributed the money.

If you repay less than the required amount in a year, the shortfall is added to your taxable income for that year, and your remaining balance is spread over the years left. At an illustrative 30% marginal rate, missing a $3,000 repayment costs about $900 in extra tax, and that portion of your RRSP room is gone for good. You can always repay faster than the schedule, which shortens the remaining instalments.

Strategy: stacking, looping and the real cost

The HBP stacks with the FHSA on the same purchase. The FHSA allows up to $40,000 of contributions ($8,000 per year) with tax-free withdrawals and no repayment, so the usual order is: max the FHSA first, then top up with the HBP if you need more. A couple using both vehicles can put well over $200,000 of registered money toward one home.

There is also a contribute-then-withdraw loop: if you have savings in a taxable account and unused RRSP room, you can contribute the cash to your RRSP, wait out the 90 days, then withdraw it under the HBP. You harvest the RRSP deduction at your marginal rate on money you were going to spend on the house anyway. The refund itself can boost the down payment.

The real cost of the HBP is opportunity cost. Money withdrawn stops compounding tax-sheltered, and your repayments only restore the principal, not the growth you missed. For someone repaying over 15 years, the gap can be meaningful; it is the price you pay for a bigger down payment today.