The FHSA gives you up to $40K + growth tax-free, no repayment. The Home Buyers' Plan (HBP) lets you borrow up to $60K from your RRSP tax-free, but you must repay it over 15 years. They are not mutually exclusive — first-time buyers can stack both for up to $100K in tax-deferred down-payment funding ($200K for a couple). The right question isn't "which one" — it's "how much of each."
| FHSA | HBP | |
|---|---|---|
| Maximum withdrawal | $40K + growth | $60K (2024+) |
| Tax-free? | Yes — no repayment | Tax-free, must repay or get taxed |
| Repayment required? | No | Yes — over 15 years |
| Contribution to grow funds | $8K/yr · 5-yr max | Use existing RRSP |
| Account expires? | 15 years | Never |
| Tax deduction on contribution | Yes | Yes (RRSP rules) |
| Couple combined max | $80K + growth | $120K |
| Effect on credit score | None | None |
This is the part most articles skip. The $60K HBP withdrawal isn't free money — it's a forced 15-year repayment plan. You must repay 1/15th of the withdrawn amount each year. If you miss a year's repayment, that amount becomes taxable income at your marginal rate. On a $60K full withdrawal, that's $4,000/year in mandatory RRSP contributions for 15 years — using contribution room you can't use for anything else. For someone earning $90K with a 30% marginal rate, missing one year costs $1,200 in tax.
FHSA has no repayment. Withdraw it, use it, done.
Starts the 15-year clock. Contribute when you have income to get the tax deduction.
FHSA gives same tax deduction as RRSP, but withdrawal is permanent and tax-free vs taxable income at retirement.
Tap HBP for the additional $60K beyond FHSA. Accept the 15-year repayment as the cost of accessing more tax-deferred funds.
$80K combined FHSA + $120K combined HBP = $200K in tax-deferred down payment. On a $1M home, that's 20% down without taxable income.