RRSP Home Buyers' Plan in Canada: How First-Time Buyers Use $60,000 Toward a Down Payment in 2026
Most first-time buyers I talk to know the RRSP Home Buyers' Plan exists. They've heard the term tossed around. Maybe a parent mentioned it. Maybe their bank teller said something. But when I ask how it actually works, the answer is usually some version of, "I think you can borrow from your RRSP for a down payment?"
That's the rough idea. The full picture is more interesting, and a lot more useful. The withdrawal limit is now $60,000 per person. The repayment rules quietly changed in 2026. And when you combine the HBP with a First Home Savings Account, a single first-time buyer can pull together $100,000 in tax-advantaged savings for a down payment. A couple? Up to $200,000.
In this post, I'll break down exactly how the Home Buyers' Plan works in 2026, who qualifies, how repayment really plays out, and the mistakes I see people make when they rush it.
In This Post
What Is the RRSP Home Buyers' Plan?
The Home Buyers' Plan, or HBP, is a federal program that lets first-time buyers withdraw money from their RRSP to put toward the purchase or build of a qualifying home in Canada. Under normal circumstances, an RRSP withdrawal is taxable as income. The HBP is the exception. As long as you follow the rules and pay it back over time, the withdrawal is treated as a tax-free loan from yourself to yourself.
The current withdrawal limit is $60,000 per person. That number jumped from $35,000 in the 2024 federal budget, and it took effect for withdrawals made after April 16, 2024. For a couple where both partners qualify, the combined cap is $120,000.
Why does this matter right now? Because the average home price in most Canadian markets has stayed well above the level where saving a 5 to 20 percent down payment from after-tax income alone is a slow climb. The HBP gives you access to the savings you've already built inside your RRSP, with no tax penalty, as long as you put it toward your first home.
It's not free money. You owe it back to yourself. But the structure makes it one of the most useful tools we have for first-time buyers in Canada, especially when you stack it with the FHSA.
Here's what most people don't realize: the HBP and the FHSA can be used for the same home purchase, in the same year, with no penalty. That stacking is what gets a single first-time buyer to $100,000 in tax-advantaged down payment funds, and a couple to $200,000. We'll get into the math later in the post, but it's the single biggest reason every first-time buyer in Canada should at least be running the numbers on both programs.
How It Works
Here's the mechanics, step by step.
You contribute to your RRSP throughout your working life. The money in there has to sit for at least 90 days before it's eligible for HBP withdrawal. So if you're planning to use the HBP this spring and you just deposited a chunk in February for the tax deduction, that fresh contribution can't be touched yet. This catches people every single year.
Once you've found a home and have a written purchase agreement in place, you fill out CRA Form T1036, the Home Buyers' Plan Request to Withdraw Funds. You submit it to the financial institution holding your RRSP. They release the funds with no withholding tax and report the withdrawal to CRA.
You can withdraw up to $60,000 in total. It can come from one RRSP or several. You're allowed to take it in multiple withdrawals, but they all need to happen in the same calendar year as your first withdrawal, with one exception: a final withdrawal is permitted in January of the following year.
The funds need to be used to buy or build a qualifying home in Canada, and you need to occupy it as your principal residence within one year of buying or building it.
HBP at a glance (2026):
Maximum withdrawal: $60,000 per person
Couple maximum: $120,000 combined
RRSP seasoning: 90 days minimum
Repayment grace period: 2 years (for 2026 withdrawals onward)
Repayment timeline: 15 years
Then comes repayment. This is where I see people get tripped up. You have 15 years to pay it back into your RRSP. Repayment doesn't start immediately. Starting with 2026 withdrawals, the grace period before repayment kicks in is 2 years. That's a return to the long-standing rule. The temporary 5-year grace period, which applied to first withdrawals between January 1, 2022 and December 31, 2025, has expired.
So if you withdraw in 2026, your first repayment is due in 2028. Each year you owe one fifteenth of what you withdrew. If you took out $60,000, that's $4,000 per year. If you don't designate at least that amount as a repayment on your tax return, the missed amount gets added to your taxable income for that year. That's the part nobody warns you about.
Who Qualifies
To use the HBP, you need to meet four conditions.
First, you need to be a first-time home buyer. CRA's definition: you (or your current spouse or common-law partner) didn't own a home that you lived in as your principal residence at any point during the current calendar year before the withdrawal, or in the previous four calendar years. So if you withdrew on May 1, 2026, the lookback period would run from January 1, 2022 to April 30, 2026.
There's a 30-day exception. You're allowed to be a homeowner in the 30 days immediately before the withdrawal. This matters because some buyers withdraw HBP funds right before closing, when they technically already have a signed agreement and a closing date pending.
Second, you need to be a Canadian resident at the time of the withdrawal and through to the time you acquire or build the home.
Third, you need a written purchase agreement, or a written agreement to build, before the withdrawal. You can't pull RRSP funds out speculatively and go shopping with cash. CRA wants to see paper.
Fourth, the home has to be in Canada and intended as your principal residence. A pure rental property, a vacation cabin, or a flip purchase doesn't qualify.
There are exceptions for people with disabilities, and for those buying a home for a related person with disabilities, even if you've previously owned. If you think this applies, talk to a broker or accountant who can walk you through the specific paperwork.
One detail that catches people off guard: separation and divorce changed the rules a few years back. If you've been living separately from your spouse or common-law partner for at least 90 days due to a breakdown in the relationship, you may qualify as a first-time buyer under the HBP even if you owned a home with that former partner. The lookback rules and timing get specific, so don't assume. Verify with your broker or accountant if this is your situation.
Real-Life Example: Jordan's Story
🏠 Real-Life Example: Jordan's Story
Jordan is 32, lives in Calgary, and has been working full time since he was 25. He's been steadily contributing to his RRSP through his employer match for seven years. As of January 2026, his RRSP balance sits at $48,000. He also opened an FHSA in 2023 and has maxed it out with $40,000 in contributions and growth.
He finds a townhouse in northwest Calgary for $475,000. With 5 percent down, he needs $23,750. With 20 percent down to skip CMHC insurance, he needs $95,000.
Here's how we structured it. He withdrew the full $40,000 from his FHSA. Tax-free, never has to be repaid. Then he withdrew $48,000 from his RRSP under the HBP. This wiped out his RRSP balance, but it was well under the $60,000 limit, and the funds had been in the account for years.
Total down payment: $88,000. Combined with $7,000 he had saved separately in his TFSA, he hit the $95,000 mark and avoided CMHC insurance entirely.
His mortgage was $380,000 at a 4.29 percent fixed rate over a 30-year amortization, since he was uninsured and using a lender that allowed extended amortization on conventional mortgages. His monthly payment came in at approximately $1,866.
Starting in 2028, Jordan needs to repay 1/15 of his HBP withdrawal each year. That's $3,200 annually back into his RRSP, or it gets added to his taxable income. He's already automated those contributions through a monthly transfer of about $267. The result: Jordan owns his townhouse, kept his FHSA savings tax-free for the future, and saved roughly $14,000 in CMHC premiums by stacking the two programs.
Common Mistakes to Avoid
1. Forgetting the 90-day rule. I've had clients deposit a big lump sum into their RRSP in February for the tax deduction, then try to pull it out for a March 15 closing. Doesn't work. The contribution has to season for 90 days before it's HBP-eligible. If you're planning a spring purchase, plan your RRSP contributions accordingly the year before.
2. Not making the annual repayment. CRA tracks your HBP balance. If you don't designate at least 1/15 of your withdrawal as a repayment each year on your tax return, that amount becomes taxable income. I've seen this turn into a $3,000 or $4,000 surprise tax bill that the homeowner had no idea was coming. Set up an automatic monthly RRSP contribution that hits the repayment threshold and forget about it.
3. Confusing the HBP with the FHSA. They're different programs with different rules. FHSA contributions are tax-deductible, withdrawals for a home purchase are tax-free, and you never repay it. HBP withdrawals come from your RRSP and must be repaid over 15 years. Use both. Don't treat them as interchangeable.
4. Assuming both partners qualify automatically. If one of you owned a home in the last four years, that side of the couple is generally ineligible for HBP, even if the other partner has never owned. Run the numbers before you assume you have $120,000 to work with.
5. Pulling HBP funds before you have an accepted offer. CRA wants a written purchase or build agreement in place before the withdrawal. Without it, you risk having the entire withdrawal treated as taxable income, which can push you into a much higher tax bracket for the year. Wait for the firm offer, then do the paperwork.
Bonus mistake I see often: using the HBP to push down to the absolute minimum down payment without thinking about CMHC insurance. If pulling HBP funds gets you from 19 percent down to 20 percent down, you avoid CMHC insurance entirely, which can save thousands. Run the math both ways before you decide how much to withdraw.
What to Do Next
If you're a first-time buyer trying to figure out whether the Home Buyers' Plan makes sense for your situation, the answer is almost always yes. But the way you use it matters.
A good plan looks at your full down payment picture: what's in your RRSP, your FHSA, your TFSA, any gifted funds from family. Then it figures out the optimal sequence so you minimize CMHC insurance, keep your tax-free savings working as long as possible, and stay within program rules. That's the kind of conversation we have with clients before they put in an offer, not after.
If you've got money sitting in an RRSP and you're starting to think about buying your first home, reach out. We'll walk through your numbers, show you what your maximum HBP plus FHSA combination looks like, and map out a down payment strategy that fits your specific situation. No pressure, no commitment, no fee.
Thinking about using your RRSP toward your first home?
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Spire Mortgage Team is licensed with Mortgage Architects in AB, BC, SK (FCAA #316728), and ON (FSRA #12728). This post is for educational purposes only and does not constitute mortgage advice. Rates and program details are subject to change. Contact a licensed mortgage professional for guidance specific to your situation.
