The Home Buyers' Plan: Borrowing From Your RRSP for a First Home

Buying your first home in Canada can feel like running up a hill that keeps getting steeper. Prices are high, and saving a down payment takes years. Here is the part that surprises a lot of people I talk to: if you have been saving inside a Registered Retirement Savings Plan, you may already be closer than you think. The Home Buyers' Plan lets you borrow from your own RRSP, tax free, to buy or build your first home. No lender and no interest. Just your own savings, put to work sooner.

What the Home Buyers' Plan actually is

The Home Buyers' Plan, often shortened to HBP, is a federal program that lets a first time buyer withdraw up to $60,000 from their RRSP to buy or build a qualifying home. The limit was raised to $60,000 in 2024, up from $35,000, which made a real difference in expensive markets. If you are buying with a partner who also qualifies, you can each use the plan, so a couple can combine their withdrawals for up to $120,000 toward a down payment.

Under normal rules, taking money out of an RRSP means tax on every dollar, and you lose that contribution room for good. Under the HBP, an eligible withdrawal is tax free and the room is preserved, as long as you follow the rules and repay over time. Think of it as a loan you make to yourself.

Who counts as a first time buyer

The name is a little misleading, because you do not have to be buying the first home you have ever owned. In general, you qualify if you have not owned a home that you lived in as your principal residence during the current year or the previous four years. So if you owned a home a while back, sold it, and have been renting since, you may qualify again.

There is also an exception after a relationship breakdown. If your marriage or common law partnership has ended, you may be able to use the plan again sooner than the four year rule would normally allow, if you meet the specific conditions. Separation is hard enough, so check your situation rather than assuming you are out of luck.

You must also intend to live in the home as your principal residence within a year of buying or building it. The HBP is for people putting down roots, not buying a rental property.

The 90 day rule and the details that matter

Here is the detail that catches people off guard. Money you contribute to your RRSP must stay there for at least 90 days before you withdraw it under the Home Buyers' Plan. If you pull it out sooner, your tax deduction for that contribution may not be valid. In plain English, you cannot top up your RRSP on Monday, claim a nice deduction, and use the same money for a closing on Friday.

This is why timing matters. Getting money into your RRSP early starts the 90 day clock ticking, so the option is there when you need it. Also confirm the current limit and rules before you rely on them, because programs change, and the details decide whether a withdrawal stays tax free.

Repayment: the 15 year clock

Now the part people forget. The money has to go back into an RRSP over 15 years. Repayment starts the second year after the year you made the withdrawal, which gives you breathing room to settle in, buy a couch, and fix whatever the home inspection politely understated.

Each year, you repay at least one fifteenth of the total you withdrew. If you took out $60,000, that is $4,000 a year. You designate part of your RRSP contributions as HBP repayment when you file your taxes. If you miss a required repayment, that amount becomes taxable income for that year, and you lose that contribution room permanently. You can repay faster, and many people do once their budget settles.

FHSA first, or HBP? How they fit together

These days, the HBP is not the only tool on the table. The First Home Savings Account, or FHSA, gives you a tax deduction when you contribute, like an RRSP, and a tax free withdrawal when you buy, like a TFSA, with no repayment required. That combination is hard to beat, which is why the FHSA now often comes first for people just starting to save. For the full picture, see my guide to how the FHSA works and who it helps most.

The HBP still shines for people who already have savings inside an RRSP. Maybe you contributed for years through work, or built your RRSP before the FHSA existed. The HBP lets that money do double duty: retirement savings today, door keys tomorrow, retirement savings again as you repay. The two programs can also work together on the same home.

Running your own numbers before you decide

Before you fall in love with a listing, see what different down payments and repayment amounts look like on paper. A bigger withdrawal means a smaller mortgage and less interest over time, but also a bigger repayment commitment every year for 15 years. Both sides deserve a clear look. You can play with the scenarios using our free online calculators and watch the monthly numbers change as you adjust them.

This article is educational only. It is not financial advice, and there are no guarantees with any strategy, because your taxes, income, and timeline are yours alone. What the HBP really offers is a choice, and choices are powerful when you understand them. If your RRSP has been quietly growing while you wondered if a home was within reach, this plan might be the bridge. Take your time, learn the rules, and when you are ready to talk it through, I am here. A first set of keys is a big moment, and nobody should have to figure it out alone.